Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinExtending yesterday's rally, gold added another 0.4% to close at a fresh two-month high above $1,954 as pandemic concerns and a weaker dollar lifted demand for alternative stores of value. The metal has risen more than 3% to start the new year after gaining 25% in 2020.

US COVID-19 hospitalizations reached a new daily record above 128,000 yesterday, with more than 2,000 deaths. In the past week, the US has averaged more than 214,000 new cases per day, according to Johns Hopkins, and experts predict January will be the worst month since the pandemic began.

Meanwhile, runoff elections are taking place in Georgia for two Senate seats that may determine the balance of power in the Senate, with pollsters and bookmakers giving a slight advantage to Democrats.

The dollar fell again, dropping 0.4% against major rivals as trader speculate that Democrat control of Congress would open the door to larger fiscal stimulus and deeper monetary easing. A falling dollar supports gold and other commodities by making them less expensive in other currencies.

The buck was also pressured after China raised its official exchange rate for the yuan, helping to spark demand for other risk-related currencies. The 1% increase, the biggest change since 2005, was intended to damp down bullish trade on the yuan.

US manufacturing rose in December at the fastest rate since the pandemic, with the ISM index climbing above 60%, the highest level in nearly 30 months.

Wall Street rose on the upbeat ISM data and hopes for additional stimulus, with all three major indexes climbing more than 0.8%.

The other precious metals were also higher with silver rising 1% while platinum and palladium jumped 4.5% and 4.3%, respectively.

At the Comex close: February gold gained $7.80 to $1,954.40; March delivery silver added 28 cents, to $27.64; April platinum rose $48.10 to $1,119.60; and March palladium picked up $102.20 to $2,493.40 an ounce.