Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1.1% to close at a one-week low under $1,643 despite tumbling equities as coronavirus anxiety prompted a broad-based sell-off of most assets. The metal has fallen 2% over the past two sessions.

COVID-19 infections in the have spiked above 1,000 in the US, prompting an increasing number of schools and Universities to cancel classes and send students home. Cities and municipalities are prohibiting large assemblies of people to try to slow the spread, and businesses are closing their doors.

The World Health Organization has officially labeled COVID-19 a global pandemic, meaning the epidemic is now spreading with little control on several continents. The international agency said it was "deeply" concerned by "the alarming levels of inaction" by many governments.

One day after rallying on hopes for stimulus measures to offset damage to the US economy, Wall Street reversed course, plunging deeply into the red as investors recognized that meaningful intervention will be slow in coming. The Dow fell 5.5% while the S&P 500 and Nasdaq both lost around 5%.

As in other recent market plunges, some funds and institutional traders were forced to liquidate gold holdings to cover margin calls on losses in equities. Other investors, however, are simply moving into cash until the confusion abates. Liquidations also hit benchmark 10-year Treasurys, pushing yields slightly higher.

Oil prices declined, with WTI crude losing 4% to close under $33 per barrel, on rising domestic supplies and the intensifying price war between Russia and Saudi Arabia. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The US cost of living crept up in February, with the CPI rising 0.1% behind higher rents and grocery prices.

The other precious metals were lower, with silver losing 1.1% while platinum and palladium fell 0.1% and 3.8%, respectively.

At the Comex close: April gold dropped $18 to $1,642.30; May silver fell 18 cents to $16.78; April platinum dipped $1.20 to $868.20; and June palladium lost $88.10 to $2,229.30 an ounce.