Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 0.6% to close under $1,909 as trader took profits from its 2.2% climb over the past week. The metal then dropped below $1,890 in after-hours trade when President Trump abruptly pulled out of stimulus talks until after the November elections.

Tweeting on his first full day out of the hospital for COVID-19, Trump ended negotiations with House Democrats over another pandemic relief package to concentrate on accelerating the confirmation of Amy Coney Barrett for the Supreme Court. He promised a major stimulus program after the upcoming election.

The surprise change of direction unnerved markets, which had been counting on additional support to revive the economy after the devasting damage done by the coronavirus. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin expressed optimism for a deal as recently as Sunday.

Earlier in the day, Fed Chair Jerome Powell emphasized the need for additional fiscal stimulus in a speech to the National Association of Business Economics. Noting that the rebound from COVID-19 was "far from complete," he warned that failure to provide further relief "would lead to a weak recovery" and create "unnecessary hardship for households and businesses."

Wall Street swung into steep losses after the tweet, with all three major indexes abruptly losing more than 1.4%. Traders were forced to scramble for cash, taking profits from gold's steady rise to a two-week high above $1,920. Treasury yields also plummeted, with the 30-year yield reaching a one-month low.

The dollar also reversed itself, moving from a small loss to a 0.4% gain against major rivals on flights to safety. A rising dollar pressures gold by making it more expensive in other currencies.

The other precious metals were mostly lower, with silver and platinum falling 2.6% and 3.8%, respectively, while palladium added 0.5%.

At the Comex close: December gold dropped $11.30 to $1,908.80; December silver lost 64 cents to $23.92; January platinum lost $34.40 to $870.30; and December palladium picked up $12.80 to $2,391.20 an ounce.