Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinAdding to last week's 0.7% rally, gold gained another 0.8% to close near $1,964 as vaccine hopes and expectations of deeper dovishness from the Fed undercut the dollar, boosting alternative stores of value. It was the metal's biggest one-day rise in more than two-weeks.

Oxford University resumed clinical trials of a promising COVID-19 vaccine, lifting equity markets hungry for an end to the pandemic. Developed jointly with AstraZeneca, the drug is considered one of the strongest contenders now in process. Trials had been suspended recently because of suspected side effects on one participant.

Wall Street rallied as mergers activity, along with the vaccine news, stoked risk appetite. Driven by tech shares, the Dow and S&P 500 gained 1.1% and 1.2%, respectively, while the tech-heavy Nasdaq added 1.7%. Oracle led way, rising more than 5% after reports that will acquire the rights to TikTok in the US, beating out Microsoft.

The dollar fell 0.3% against major rivals, dropping to a two-week low against the yen as traders speculate that the Fed will lean into deeper monetary easing when it meets this week. A weaker dollar supports gold and other commodities by making them less expensive in other currencies.

The central bank recently announced a new policy of letting inflation run above its 2% target for extended periods, reinforcing its pledge to keep interest rates low for longer. Gold has risen nearly 30% this year behind global monetary easing and negative real interest rates, both of which are expected to go on for the foreseeable future as the global economy struggles to emerge from the pandemic recession.

The other precious metals were mostly higher, with silver and platinum rising 1.9% and 2%, respectively, while palladium dipped 0.3%.

At the Comex close: December gold gained $15.80 to $1,963.70; December silver rose 50 cents to $27.36; October platinum climbed $19.20 to $958.70; and December palladium dipped $6.40 to $2,324.40 an ounce.