Gold prices had been pressured by strength in the U.S. dollar during most of Wednesday until the Fed released forecasts indicating it is likely to maintain "a highly accommodative stance for monetary policy" and that U.S. economic conditions are "likely to warrant exceptionally low levels for the federal funds rate at least through late 2014." The news was taken as inflationary long-term, and drove gold and other precious metals sharply higher.
"The fundamentals for gold are still very bullish with interest rates at historical lows, massive government spending and loose monetary policies; inflation will begin to raise its head and people will be seeking yield over the coming months and years," MarketWatch quoted James Carrillo, senior portfolio adviser for precious-metals investment firm Swiss America Trading Corp.
Gold prices rallied $35.60, or 2.1%, to $1,700.10 an ounce in the February futures contract on the Comex in New York. The closing was gold’s first above the level since December 9. Gold prices touched an intraday low of $1,649.20 and reached a high of $1,704.50.
"We saw an immediate reaction in gold" after the Fed statement, said Michael A. Gayed, the chief investment strategist who helps oversee $150 million at New York-based Pension Partners LLC in a telephone interview that was recounted on Bloomberg. "People are betting that at some point the economy will face inflationary pressures because of the low interest rate."
Silver prices for March delivery surged $1.146, or 3.6%, to settle at $33.121 an ounce. Silver prices moved from $31.525 to $33.320.
Platinum prices for April delivery advanced $27.20, or 1.8%, to $1,579.60 an ounce, ranging from $1,543.00 to $1,584.90. Palladium prices for March delivery rose $12.80, or 1.9%, to $693.35 an ounce, trading between $671.00 and $696.00.
London Precious Metals
London precious metals were fixed prior to the Fed news, and mostly suffered losses. When comparing the London fixings on Wednesday (PM) from those on Tuesday (PM), gold prices declined $15.50 to $1,650.00 an ounce, silver fell 28 cents to $31.67 an ounce and palladium dipped $1.00 to $675.00 an ounce. Platinum was the exception in metals, rising $5.00 to $1,546.00 an ounce.
U.S. Mint Bullion Coins
U.S. Mint bullion coins were mostly muted Wednesday. The only gain reported by the Mint was a sales increase of 1,000 for the one ounce American Gold Eagle. The latest daily and year-to-date bullion coin sales follow:
| Sales of U.S. Mint American Eagle and Buffalo Bullion Coins | ||
|---|---|---|
| Daily Gains | January/YTD 2012 | |
| American Gold Eagle Coin (1 oz.) | 1,000 | 76,000 |
| American Gold Eagle Coin (1/2 oz.) | 0 | 46,000 |
| American Gold Eagle Coin (1/4 oz.) | 0 | 32,000 |
| American Gold Eagle Coin (1/10 oz.) | 0 | 75,000 |
| American Gold Buffalo Coin (1 oz.) | 0 | 10,500 |
| American Silver Eagle | 0 | 5,547,000 |
| Sales of America the Beautiful 5 Oz. Silver Bullion Coins | |||
|---|---|---|---|
| Prior Weekly | Weekly Gains | All-Time Total | |
| Olympic National Park 5 oz. Silver Coin | 0 | 0 | 84,600 |
| Vicksburg National Military Park 5 oz. Silver Coin | 2,000 | 0 | 36,300 |
| Chickasaw Park 5 oz. Silver Coin | 500 | 0 | 27,400 |
| TOTAL | 2,500 | 0 | 148,300 |
All bullion coin totals in the above tables are in the number of coins sold, not the amount of ounces. The U.S. Mint does not provide daily sales figures for its 5-ounce silver coins. The latest 5-ounce sales are current as of Tuesday, January 17, 2012.
