Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.6% to close above $1,893 as oil rose and the dollar fell to a 30-month low on optimism about fiscal stimulus and vaccine rollouts, boosting demand for alternative assets.

Britain became the first nation to approve the cornonavirus vaccine developed by AstraZeneca and Oxford University, leading to expectations that the US will not be far behind. The availability of a third effective vaccine raises hope that the pandemic may be brought under control sometime next year.

Senator Mitch McConnell blocked a vote on increasing aid checks to Americans from $600 to $2,000, a change advocated by President Trump and Congressional Democrats. But the markets remained upbeat that the additional stimulus already approved will mitigate deeper economic damage in coming months.

Wall Street traded higher, with the Dow adding 0.3% while the S&P 500 and Nasdaq picked up 0.2%.

The dollar fell another 0.4% as traders shifted toward riskier currencies on the stimulus and vaccine outlook, pressing the ICE Dollar Index to its lowest level since April 2018. A weaker dollar lifts gold and other commodities by making them less expensive in other currencies, spurring overseas demand.

Gold was also supported by rising oil after falling US inventories and Middle East tensions lifted WTI crude 0.8% to $48.40 per barrel. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

For the second time this month, B-52 bombers flew over the Persian Gulf as a warning to Iran. Intelligence has reportedly surfaced suggesting a possible attack on US allies or facilities in the region.

The other precious metals were also higher, with silver rising 1.4% while platinum and palladium both climbed 1.5%.

At the Comex close: February gold gained $10.50 to $1,893.40; March silver rose 36 cents to $26.57; April platinum added $15.90, to $1,078.50; and March palladium climbed $34.10 to$2,378.40 an ounce.