Gold Soars on Weak U.S. Durable Goods Report

December Comex Gold prices surged a little over 2.00% to $1156.40, as the U.S. Dollar eased after fresh economic data showed durable goods fell 2.00% in August.

The drop in durable goods and the rally in gold suggests that investors are increasing bets the Fed may have to postpone its interest rate hike into late 2015 or early 2016. Besides the timing of the next Fed rate hike, forecasts of slower global economic growth have scared investors into gold, treating the metal as a safe-haven investment.

Investors are confused about the Fed because of the mixed message it has been sending. Last week’s dovish monetary policy statement was supportive for gold, however, comments from FOMC officials earlier in the week triggered a downside correction. Today’s price action suggests investors are taking a more dovish attitude towards the central bank.

January Platinum posted a strong gain after a hard sell-off earlier in the week drove prices into a new contract low. Traders were reacting to the Volkswagen emissions scandal. Palladium also traded higher after weakness earlier in the week. Platinum and Palladium are directly involved in the emissions scandal since both are used in the production of catalytic convertors.

November Crude Oil prices crept higher on light volume on Thursday after stock market weakness drove the market lower after the opening. Also pressuring the market early was follow-through selling after yesterday’s bearish U.S. Energy Information Administration inventories report.

Although crude oil inventory drew down more than expected, gasoline inventories skyrocketed, putting pressure on crude prices. Crude oil inventory was down 1.9 million barrels versus an estimate of only 1 million barrels. The EIA data showed gasoline stocks rose 1.4 million barrels the week-ended September 18, compared with an 819,000 barrel gain.

Today’s late session rally was likely related to bargain hunting and reports from Genscape of a 625,000 barrel drawdown at Cushing, Oklahoma on September 22.

The EUR/USD continued its rally and the GBP/USD reversed higher after the release of a bearish U.S. Durable Goods report dampened calls for a Fed rate hike. The U.S. Dollar was also pressured ahead of a post-close speech from Fed Chair Janet Yellen. The Fed Chair speaks at 5:00 p.m. ET.

Today’s economic news featured the U.S. Durable Goods which showed a decline of 2 percent. Weekly unemployment claims were 267,000. August new home sales came in at 552,000.