Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 1.4% to close at a two-week high above $1,866 as the inauguration of Joe Biden as President boosted hopes for additional fiscal stimulus, spurring demand for alternative stores of value.

The incoming Biden administration, in conjunction with Democrats in control of both chambers of Congress, is intent pushing through a $1.9 trillion spending package to support individuals, small businesses, and state and local governments in financial distress from the raging pandemic.

At her confirmation hearing before the Senate Finance Committee yesterday, Treasury nominee Janet Yellen argued that "it is critically important to act now" and "act big" to prop up the economy. Failure to do so, she warned, would damage the nation both "fiscally and with respect to our debt situation."

Combined with record levels of quantitative easing and near-zero interest rates from the Federal Reserve, the huge increases in deficit spending are expected to spur inflation by flooding the economy with cash. Gold is often sought as portfolio insurance to combat loss of spending power due to sharply higher inflation.

Wall Street cheered the prospect of additional spending, with the Dow and S&P 500 rising 0.8% and 1.5%, respectively, while the tech-heavy Nasdaq jumped 2.1%, led by Netflix outperformance. The dollar was little changed and Treasury yields edged lower.

Oil rose for a second session, with WTI crude adding 0.6% to settle at $53.31. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also higher, with silver climbing 1.8% while platinum and palladium picked up 2.2% and 1.6%, respectively.

At the Comex close: February gold gained $26.30 to $1,866.50; March silver jumped 45 cents to $25.77; April platinum rose $24.40 to $1,116.40; and March palladium added $38.20, to $2,403.20 an ounce.