Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold futures surged another 1.3% to close at $1,890 as rising jobless claims, a falling dollar, and hopes for additional fiscal stimulus drew investors further into alternative stores of value. The metal was just shy of its highest Comex finish on record, $1,891.90 on August 22, 2011. The all-time intraday peak was $1,923.70 on September 6 of that year.

US jobless claims rose unexpectedly last week for the first time since late March as the resurging coronavirus pandemic causes regions to resume closures. More than 1.4 million American filed for first-time benefits, excluding those who applied through federal programs that are due to expire this week.

Adding to the economic uncertainty, Congress continues to bicker over the next aid package, pushing likely passage off to as late as mid-August. Meanwhile, the US is expected to surpass 4 million confirmed cases of COVID-19 today, with around 25% coming in just the past two weeks.

Wall Street tumbled on the grim employment and pandemic news, with the Dow falling 1.6% while the S&P 500 and Nasdaq lost 1.5% and 2.5%, respectively.

Yields on benchmark 10-year Treasury notes fell to the lowest level since April, driving real interest rates further into the negative as investors migrated toward safety. Gold thrives under negative real rates because they reduce the opportunity cost for holding the metal, which produces no yield but tends to track higher with inflation.

The dollar fell 0.2% again, dropping to a two-year against major rivals as measured by the ICE Dollar Index, as traders bet that the US economy will underperform because of rising coronavirus issues. A weaker dollar supports gold and other commodities by making them less expensive in other currencies.

The other precious metals were mostly higher, with platinum and palladium rising 0.7% and 0.5%, respectively, while silver slid 0.6% on profit-taking after skyrocketing 15% higher over the past two sessions.

At the Comex close: August gold gained $24.90 to $1,890; September silver slipped 15 cents to $22.99; October platinum climbed $6.40 to $963.80; September palladium added $10.80 to $2.215.20 an ounce.