Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dropped 2.6% to close near $1,910 as rising COVID-19 cases, a global financial scandal, and deeper domestic political turmoil spurred a sharp Wall Street selloff, forcing traders to liquidate other assets to cover losses. It was the metal's lowest finish since late July.

Rising coronavirus infections across Europe are sparking fears that another wave of lockdowns could snuff out the fragile global recovery. Britain and France are weighing new restrictions on social and economic activity while Spain has already ordered a new lockdown of areas in Madrid.

US infections are also on the rise, with new daily cases averaging 39,700 over the past week, according to Johns Hopkins data, up 13% from the week before.

Adding to investor anxiety, several of the world's biggest banks have been implicated in more than $2 trillion in suspect transfers, suggesting complicity in money laundering and other illicit activities over the past 20 years.

Wall Street plunged to seven-week lows, with the Dow falling 3% while the Global Dow lost 3.3%, as investors shed risk. Liquid assets like gold were swept up in the selloff as traders were forced to find cash to cover losses.

Financial shares were hit especially hard. JPMorgan and Bank of New York Mellon lost 4% while Deutsche Bank plunge 8% and HSBC shares hit the lowest in 25 years.

The death of Justice Ruth Bader Ginsburg also contributed to risk-off sentiment. A fierce battle over her replacement is expected to deepen national divisions and prevent another round of fiscal stimulus. The Chicago Fed reported today that US economic activity fell sharply in August, the latest indication that earlier fiscal stimulus has largely faded.

Further pressuring gold, the dollar rallied 0.8% as Forex traders shifted into safe-havens currencies. A stronger dollar weighs on gold and other commodities by making them more expensive overseas.

The other precious metals fell harder, with silver plunging 10.1% while platinum and palladium lost 6.7% and 4.2%, respectively.

At the Comex close: December gold dropped $51.50 to $1,910.60; December silver tumbled $2.74 to $24.39; October platinum lost $62.40 to $876.10; and December palladium surrendered $99.10 to $2,281.70 an ounce.