Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinExtending last week's 2.2% rise gold added another 0.7% to close above $1,920 as stimulus hopes and upbeat data pressured the dollar, lifting demand for alternative stores of value. It was the metal's highest close in two weeks.

Over the weekend, Speaker Nancy Pelosi expressed optimism that a new COVID-19 aid package will be approved soon. House Democrats passed a slimmed-down $2.2 trillion bill last week, prompting a counteroffer of $1.6 trillion from the White House and Senate Republicans.

The US services sector grew for the fourth month in September, with the ISM index rising to 57.8% from 56.9% in August. The survey monitors perceived improvement in conditions from the previous month among business executives, not actual economic performance.

Wall Street applauded the new stimulus prospects and solid services report, prompting the Dow and S&P 500 to jump 1.7% each and the Nasdaq 2.2%.

The dollar fell 0.4% against major rivals as Forex traders shifted towards riskier assets like the euro. A weaker dollar supports gold and other commodities priced in it for global trade by making them less expensive overseas.

Along with near-zero interest rates and monetary easing from the Fed, additional fiscal stimulus is considered bullish for gold because it increases the possibility of higher inflation and currency debasement. Gold is often used as a hedge against both risks.

President Trump's contraction of COVID-19 and the confusion surrounding reports on his condition also lifted the metal on safe-haven inflows.

The other precious metals were also higher, with silver rising 2.2% while platinum and palladium climbed 1.5% and 2.3%, respectively.

At the Comex close: December gold gained $12.50 to $1,920.10; December silver rose 53 cents to $24.56; January platinum climbed $13.30 to $904.70; December palladium added $53.40, to $2,378.40 an ounce.