Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold jumped 2.7% to close above $1,946 as the surging global pandemic and rising political uncertainty in the US undercut equities, boosting demand for safe-haven assets. It was the metal's highest finish since early November.

Confirmed global cases of COVID-19 reached 85 million today, with a death toll exceeding 1.8 million, as highly contagious variants of the virus have begun spreading. The US is recording more than 213,000 cases and 2,600 deaths each day, according to Johns Hopkins, with totals expected to rise in coming weeks because of holiday travel and socializing.

Equities pulled back on concerns about the pandemic's effect on the economy this winter amidst delays in the rollout of vaccines. The Dow dropped 1.8% while the S&P 500 and Nasdaq tumbled 2% each. The VIX volatility index, known as Wall Street's fear gauge, jumped to a two-week high.

Uncertainty surrounding tomorrow's Senate runoff elections for two seats in Georgia, which have the potential to alter the balance of power in Washington, also weighed on risk appetite.

After rebounding from a deep early plunge on safe-haven inflows, the dollar held at a 30-month low, pressured by expectations that low interest rates and deeper monetary easing will undermine the currency for year to come. A weaker dollar is bullish for gold and other commodities priced in dollars for global trade because it makes them less expensive overseas.

Chicago Fed President Charles Evans said today that the central bank should aim to push inflation above 2.5% to achieve average inflation of 2%, its new policy target. Easy money policies like quantitative easing and near-zero interest rates will be needed for a long time, Evans added.

In 2020, gold rose 25% and silver jumped 48% while the dollar fell nearly 7% behind pandemic-induced monetary easing. These trends are likely to continue in 2021.

The other precious metals were mixed, with silver rising 3.6% while platinum and palladium slid 0.7% and 2.6%, respectively.

At the Comex close: February gold jumped $51.50 to $1,946.60; March silver surged 95 cents to $27.36; April platinum slipped $7.70 to $1,071.50; and March palladium fell $62.60 to $2,391.20 an ounce.