Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 1.6% to close at $1,625 as traders took profits from this week's sharp rally to cover stock market losses. Surging nearly 10% since last Friday, the metal notched its biggest weekly win since September 2008, when the collapse of Lehman Brothers launched the global financial crisis.

Silver dropped 1% to close at $14.53, also on profit-taking, but posted a weekly rise of 17%, its biggest in 33 years.

With confirmed cases of COVID-19 now exceeding 85,000, the US has surpassed China and Italy for most in the world. Businesses have shuttered; entire industries, like airline travel and hotels, have slowed to a crawl; and unemployment has skyrocketed above 3.2 million this week alone.

Against this backdrop, the House of Representatives today passed the Senate's $2.2 trillion aid package intended to cushion individuals and companies from the inevitable recession. President Trump is expected to sign it quickly into law.

The bailout follows this week's announcement of unlimited quantitative easing from the Federal Reserve, which will flood markets with cheap liquidity to promote lending and spending.

These historic and unprecedented emergency measures come a week after interest rates were slashed to near zero for the first time since 2009. Gold rallied in response as investors sought protection from currency debasement and economic turmoil.

Even with help on the way, Wall Street fell sharply as investors fear the uncertainty facing the US economy. The Dow dropped 4% while the S&P 500 and Nasdaq lost 3.3% and 3.7%, respectively.

Despite today's losses, all three indexes finished around 20% higher for the week, rebounding from historic plunges on monetary easing and the promise of bailout money from Congress. Yet they remain in bear markets, down more than 20% from their recent peaks in February.

As we've seen several times in recent weeks, today's stock selloff prompted liquidations in the gold and silver markets to cover margin calls on leveraged equity investments. Considered currencies of last resort, these metals are highly liquid and readily tapped for instant cash.

Also pressuring gold, the dollar rebounded 1% against major rivals as coordinated monetary easing by other central banks weakened their currencies. The buck still lost around 4% for the week for its worst weekly performance in four years.

The other precious metals were mixed for the day but higher for the week. Platinum rose 0.4% today and 19% this week, while palladium lost 1.3% today but jumped 42% this week. Both PMGs were lifted by mine shutdowns in South Africa and Russia due to COVID-19.

At the Comex close: April gold slid $26.20 to $1,625; May silver fell 14 cents to $14.53; April platinum picked up $3.20 to $740.30; June palladium lost $29.30 to $2,196.80 an ounce.