Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinRallying for the fourth straight session, gold added another 0.6% to close above $1,820 as a falling dollar, rising COVID-19 cases, and assurances of more monetary easing by the Fed spurred demand for alternative assets.

The dollar lost 0.5% against major rivals, sliding to two-week low, as the euro and commodity currencies like the Australian, New Zealand, and Canadian dollar found their footing. The aggressive return of coronavirus in the US is leading to traders to expect faster rebounds in other economies, reducing the desirability of the US currency.

The buck fell into a technical formation known as the "death cross" this week, which occurs when the 50-day average crosses below the 200-day average. In eight of nine occurrences since 1980, the death cross has presaged further weakness. A falling dollar tends to support gold and other commodities by making them cheaper overseas.

Fed Vice Chair Richard Clarida said today that the central bank is ready to provide yet more monetary easing if the economy needs it. "We have a lot of accommodation in place," the Fed's No. 2 told CNN, and "there's more that we will do."

The Fed has already added $4 trillion to its balance sheet since March after declaring unlimited quantitative easing to rescue the economy from its sharpest decline since the 1930s. The last time the Fed resorted to this level of stimulus, gold rallied to its all-time high above $1,911 in 2011.

The World Gold Council reported yesterday that net annual inflows into gold-backed ETFs surged to a new record of $39.5 billion, handily surpassing the previous record of $23 billion in 2016.

The other precious metals were mostly higher, with silver and platinum rising 2.55 and 2.4%, respectively, while palladium slipped 0.7%.

At the Comex close: August gold gained $10.70 to $1,820.60; September silver jumped 46 cents to $19.16; October platinum rose $20.80 to $884; and September palladium slid $13.30 to $1,938.30 an ounce.