Precious metals shine

Gold rallies past $1,200 an ounce to settle at their highest level in nearly a month

Bullion prices ended substantially higher on Thursday, 18 June 2015. Gold futures rallied past $1,200 an ounce to settle at their highest level in nearly a month as the Federal Reserve signaled it will raise interest rates at a gradual pace, pressuring the U.S. dollar.

Gold for August delivery leapt $25.20, or 2.1%, to settle at $1,202 an ounce on Comex.

July Comex silver was last up $0.218 at $16.16 an ounce.

Prices began climbing in electronic trade Wednesday as the Fed indicated that while it expects its benchmark fed-funds rate to eventually rise to 3.75% in the longer run, the likely path to that level will be gradual. The Fed's view pressured the U.S. dollar which tends to benefit from higher interest rates. In turn, gold and other commodities found support from the dollar's decline, as a cheaper dollar makes those commodities less expensive to users of other currencies.

Some markets, including gold, saw a somewhat delayed reaction to the conclusion of the Federal Reserve's Open Market Committee (FOMC) meeting Wednesday afternoon and the following press conference from Fed Chair Janet Yellen. While the Fed did not raise U.S. interest rates at this meeting and said the U.S. economy continues to improve, Yellen did signal in her press briefing that the Fed will remain highly accommodative even when it does raise interest rateslikely later this year.

European stock markets were pressured again Thursday amid increasing worries about Greece defaulting on its debt obligations to the European Union and International Monetary Fund. Greece-EU debt negotiations broke down last Sunday. Greece's central bank on Wednesday warned of an uncontrollable crisis if the debt talks ultimately fail.

Asian stock markets sold off Thursday on heightened worries of a stock market bubble in China. Those notions also led to some buying of gold.

Gold prices continued to trade higher following a spate of U.S. economic data Thursday. The May consumer-price index saw its biggest gain in more than two years, but was still lower than economists had expected. Weekly jobless claims fell to 267,000, holding ground near a 15-year low.

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