Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 5.6% to close above $1,567 after the Federal Reserve announced new and unprecedented monetary stimulus to cushion the economy from a coronavirus recession. The metal's $83 per ounce jumped was biggest one-day increase on record.

In an extreme emergency action, the Fed announced it will expand quantitative easing by purchasing unlimited amounts of Treasurys and securities tied to home and business mortgages. The move comes little more than a week after slashing interest rates to near-zero and announcing QE of $800 billion.

With the economy sliding toward free fall, the Fed is pulling out all the stop to prevent mass layoffs and generate liquidity in markets that might otherwise seize up. Tantamount to printing money, QE floods the economy with cheap cash to promote lending and spending.

Instrumental in pulling the US out of the Great Recession following the 2008 financial crisis, limited QE programs helped to propel gold to its all-time high above $1,900 in 2011.

Equity markets were little soothed by the announcement, with the Dow, Global Dow, and S&P 500 all dropping 3%. According to Bank of America, the S&P has fallen more than 30% from its peak just 22 days ago, the fastest plunge of that magnitude in history.

The dollar fell 0.3% against major rivals after the QE announcement, supporting gold and other commodities by making them less expensive overseas. Treasurys rallied alongside gold on fights to safety, depressing yields.

The other precious metals were also higher, with silver soaring 7.1% while platinum and palladium rose 0.8% and 1.1%, respectively.

At the Comex close: April surged $83 to $1,567.60; May silver jumped 88 cents to $13.26; April platinum added $5, to $627.50; June palladium picked up $16.70 to $1,556.90 an ounce.