AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

3/21/2019: Gold gains on Fed rate view

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.4% to close above $1,307 following yesterday's dovish policy statement from the Federal Reserve. The metal surged as high as $1,320 before rising risk appetite and a rebounding dollar caused traders to take profits.

The Fed signaled the end of monetary tightening at this week's meeting, calling for no rate hikes in 2019 and perhaps one in 2020. In addition, the central bank will stop unwinding its balance sheet by September, ending the program of quantitative tightening that began in October 2017.

The dollar initially fell 0.9% on the dovish Fed turn, supporting sharply higher prices for gold and other commodities priced in dollars for global trade by making them less overseas.

The buck rebounded today, however, adding 0.6% against major rivals after the UK pound plunged 1.1% on a Brexit ultimatum from the European Union. The EU said it will allow a Brexit extension until late May only if PM Theresa May's plan for leaving the union, which has been rejected three times, is approved as it stands. Otherwise, Britain crashes out without a trade agreement next week.

US equities rallied on the Fed's shift in policy, further capping gold's gains, with the Dow rising 0.8% and Nasdaq 1.4%.

The other precious metals were mostly higher, with silver and platinum rising 0.8% and 0.2%, respectively, while palladium fell 0.2%.

At the Comex close: April delivery gold gained $5.60 to $1,307.30; May silver rose 12 cents to $15.44; April platinum added $1.50, to $861.10; and June palladium slipped $2.50 to $1,557.90 an ounce.