Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinExtending its 3% rally from yesterday, gold added another 0.4% to close above $1,745 as historically weak economic data and rebounding oil drove investors into alternative stores of value.

As the COVID-19 toll deepened, U.S. business activity fell to record lows in April. IHS Markit's Composite Output Index, which tracks services and manufacturing, tumbled to its weakest reading since late 2009 in the depths of Great Recession. The services sector, which accounts for around 60% of the economy, plunged to an all-time low; manufacturing output, 11% of GDP, was the worst in 11 years.

Stay-at-home orders affecting around 90% of Americans have driven the unemployment rate to 15-20%, according to most estimates. First-time claims for unemployment benefits rose last week by another 4.4 million, meaning 26 million workers have lost their jobs in the past six weeks, the biggest spike since the 1930s.

The ray of sunshine in these shocking numbers is that the deepest losses may be over. Unemployment claims have been tapering off for the past three weeks, and some states are moving toward reopening their economies.

Wall Street rose on this hope, with the Dow adding 0.6% while the S&P 500 and Nasdaq picked up 0.3%. Rising energy shares added to the minor risk rally after oil jumped another 23% to $17 per barrel. Gold often trade in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also higher, with silver edging up 0.1% while platinum and palladium rose 3% and 5.8%, respectively.

At the Comex close: June gold gained $7.10 to $1,745.40; May silver added 2 cents, to $15.36; July platinum climbed $22.70 to $788; and June palladium surged $108.80 to $2,001 an ounce.