Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 1.1% to close just under $1,740 as downbeat forecasts about the economy and coronavirus hammered Wall Street, spurring demand for safe-haven assets. The metal reached an intraday high near $1,755 before pulling back on a sharply higher dollar.

At the end of its two-meeting meeting yesterday, the Federal Reserve said it expects GDP to contract 6.5% in 2020, year-over year, with the unemployment rate remaining above 9% by year end. The central bank pledged to keep interest rates near zero until 2023 and continue quantitative easing "at least at the current levels" for as long as needed.

The Fed's grim outlook caused stock indexes to plummet as investors shed risk for safety. The Dow fell 7% while the S&P 500 and Nasdaq shed 5.9% and 5.3%, respectively. US Treasurys rallied alongside gold, knocking yields lower.

Adding to risk-off sentiment, reported cases of COVID-19 in the US surpassed 2 million this week with 112,000 deaths. While the numbers decreased in some hard-hit locations, the 7-day average of new cases has risen in more than 20 states, prompting concerns that the ending of lockdowns was premature, and that a second wave of infections may be coming.

Meanwhile, the head of Harvard's Global Health Institute told CNN that the number of US deaths from COVID-19 is likely to pass 200,000 by September at the current rate.

Capping gold's gains, the dollar surged 0.7% against major rivals as Forex traders also shifted away from risk. A rising dollar pressures gold and other commodities by making them more expensive overseas.

The other precious metals were mixed, with silver adding 0.5% while platinum and palladium fell 2.6% and 1.1%, respectively.

At the Comex close: August gold gained $19.10 to 1,739.80; July silver added 9 cents, to $17.89; July platinum lost $22 to $824; and September palladium dropped $20.70 to $1,910.10 an ounce.