Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained for a second session, adding another 0.7% to close above $1,886 despite record-high equities as investors were caught between optimism about a promising coronavirus vaccine and concerns about the raging pandemic. The metal ended the week down 3.4%.

The announcement on Monday that a vaccine developed jointly by Pfizer and Germany-based BioNTech achieved 90% effectiveness in Phase 3 trial caused risk appetite to surge, rallying stocks while pressuring gold to a 5% loss to start the week.

The welcome news came as the US shifts into one of its most dangerous periods of the pandemic, with daily cases rising to new records, hospitalizations overwhelming, available beds in many states, and the daily death toll climbing steadily toward 2,000.

Meanwhile, Washington remains gridlocked as President Trump contests the outcome of last week's election.

Still, risk appetite rose again today on vaccine hopes. The Dow added 1.4% after hitting a new intraday record above 29,550 while the S&P 500, also gaining 1.4%, closed above 3,585 for a new all-time high.

At the same time, appetite for safe-havens like gold and silver rebounded from its early-week hammering as investors hedged against growing fears that the resurgence of COVID-19 could lead to new lockdowns before the vaccine achieves widespread distribution.

Fed Chair Jerome Powell echoed this concern today in a webcast with global central bankers, warning that "it's just too soon to assess with any confidence" the vaccine's impact on the economy and "the next few months could be challenging."

Consumer sentiment slipped in November to a three-month low on COVID concerns while wholesale inflation rose for the sixth straight month, adding to interest in gold as an inflation hedge.

The dollar fell 0.3% against major rivals, also supporting the metal. A weaker buck typically lifts gold and other commodities by making them less expensive overseas.

The other precious metals were mixed for the day and lower for the week. Silver rose 1.9% today but still fell 3.5% this week. Platinum added 1.4% but posted a weekly loss of 0.4%. Palladium fell 0.5% today and 6.8% this week.

At the Comex close: December gold gained $12.90 to $1,886.20; December silver climbed 47 cents to $24.78; January platinum added $12, to $896; and December palladium slid $12.20 to $2,329.70 an ounce.