AGE Daily Gold Update

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

6/16/2021: Gold rises, then tumbles after Fed

Source: Bill Musgrave, American Gold Exchange

Austin — Gold added 0.3% to close near $1,862 ahead of the conclusion of the Federal Reserve two-day policy meeting. The metal then tumbled around 1% to under $1,840 in electronic trading after the central bank signaled the possibility of two rate hikes in 2023.

Keeping interest rates unchanged, the Fed once again dismissed sharply higher inflation over recent months as transitory and stated the quantitative easing will continue at $120 billion per month until it sees "substantial further progress" in the economy.

However, the Fed raised its inflation forecast to 3% this year from 2.2% and signaled that two interest rate increases could come in 2023, up from its previous forward guidance of no hikes until 2024.

The dollar quickly jumped 0.7% on the possible change in rate scheduling, pressuring gold and other commodities priced in it for global trade by making them more expensive in other currencies.

Benchmark 10-year Treasury yields edged only slightly higher to 1.55%, with bond traders to heart the Fed's message that sustained inflation is still of little concern to the committee.

The other precious metals were mixed before and uniformly lower after the Fed's report. Silver rose 0.4% before and then fell 0.8% after. Platinum slid from a loss of 0.6% to one of 1.4%, and palladium trimmed its gain from 2.6% to 1.4%.

At the Comex close: August gold gained $5 or 0.3% to $1,861.40; July silver rose 12 cents to $27.81; July platinum slid $6.70 to $1,141.90; and September palladium climbed $72 to $2,836.80 an ounce.