Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.5% to close above $1,736 despite rallies in stocks and the dollar as investors reacted to increasing COVID-19 infections at home and abroad, fueling safe-haven demand.

Facing a possible second wave, Beijing escalated its coronavirus emergency response from level II to level II, closing schools and locking down parts of the capital city. The moves came after more than 100 new cases were confirmed in the past few days.

South America is seeing the strongest spread, with Brazil now second only to the US in COVID-related deaths.

In the US, more than 20 states are seeing infections rise since the lifting of lockdowns started in May. Florida and Texas reported new cases and hospitalizations rose to highest levels since the pandemic began.

On the positive side of economic reopening, retail sales surged nearly 18% in May, the biggest jump on record. Stimulus money and pent up demand after two months of stay-at-home orders drove auto sales higher by 44% while non-auto purchases rose 12%. Retail sales had plunged a staggering 25% in the prior two months.

Wall Street rallied on the upbeat data, with the Dow jumping 1.8% while the S&P 500 and Nasdaq added 1.7% and 1.5%, respectively.

Tempering risk appetite and supporting gold, Fed Chair Jerome Powell warned the Senate today that "significant uncertainty remains" about the recovery despite positive retail sales and unemployment data. Powell emphasized that "output and employment remain far below their pre-pandemic levels," and that the economy will require more fiscal stimulus from Congress for a full recovery.

Capping gold's gains, the dollar rose 0.3% against major rivals following the data on retail sales. A stronger dollar pressures gold by making it more expensive overseas.

The other precious metals were also higher, with silver rising 1.5% while platinum and palladium picked up 2.7% and 0.5%, respectively.

At the Comex close: August gold gained $9.30 to $1,736.50; July silver rose a quarter to $17.65; July platinum jumped $22.20 to $843.90; and September climbed $9.60 to $1,942.70 an ounce.