Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 2.1% to close near $1,819 as new hopes for a stimulus deal weakened the dollar and boosted demand for inflation hedges. It was the metal's biggest one-day rise since early November.

A bipartisan group in Congress unveiled a $908 billion COVID-19 relief package today, including assistance for unemployed workers, small businesses, and state and local governments. While still needing approval from party leaders on both sides, the proposal signals a thaw in long-frozen negotiations.

Speaking before the Senate Banking Committee, Fed Chair Jerome Powell suggested his support for the new deal and repeated his warning that "more fiscal stimulus is needed" to salvage the economy. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi are schedule meet today on COVID relief and government funding.

The dollar tumbled on the stimulus talk, with the ICE index dropping 0.6% to a 30-month low as traders shifted towards riskier currencies. A weaker dollar supports gold and other commodities by making them less expensive overseas.

Additional stimulus spending, like monetary easing from the Fed, is widely viewed as inflationary because it pushes additional money into circulation to promote spending. Gold has risen around 19% this year behind the unprecedented easing and stimulus spending caused by the pandemic.

The other precious metals were also sharply higher, with silver jumping 6.6% while platinum and palladium rose 3.9% and 1%, respectively.

At the Comex close: February gold surged $38 to $1,818.90; March silver jumped $1.50 to $24.09; January platinum climbed $38 to $1,003.90; and March palladium rose $23.80 to $2,429.70 an ounce.