Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.8% to close above $1,835 as bargain-hunters entered the market after Friday's 4% tumble. The metal 's rise came as falling equities and rising COVID-19 cases sparked safe-haven demand despite continued strength in bond yields and the dollar.

Wall Street retreated from recent highs, with the Dow falling 0.3% while the S&P 500 and Nasdaq faltered by 0.7% and 1.3%, respectively, on worries that another impeachment of President Trump will delay the approval of additional fiscal stimulus.

Democrats in Congress are pushing to impeach on grounds of inciting insurrection after a violent mob invaded and occupied the Capitol Building last week, hoping to overturn the November election. At least five people died in the riot.

Yields on Treasurys continued to climb on expectations that control of both chambers of Congress will enable the incoming Biden administration to push through huge increases in spending on pandemic stimulus and infrastructure, accelerating inflation.

The dollar also extended its rally, adding 0.4% against major rivals behind the rise in yields and the prospect of a rebound in the US economy because of additional stimulus. A stronger dollar typically weighs on gold and other commodities priced in it for global trade by making them more expensive in other currencies.

Gold fell 3.2% last week after the benchmark 10-year Treasury sold off, pushing yields to the highest level since June. But the very reason for the rising yields–expectations for higher inflation because of trillions of dollars in likely stimulus–is also seen as bullish for gold in the longer term as an inflation hedge.

The other precious metals were mostly higher, with silver and palladium rising 2.6% and 0.6%, respectively, while platinum fell 2.5%.

At the Comex close: February gold gained $15.40 to $1,835.40; March silver jumped 65 cents to $25.28; April platinum for delivery fell $26.70 to $1,044.60; and March palladium rose $13.80 to $2,378.80 an ounce.