Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.4% to close above $1,700 after scary US economic data and the threat of a new trade war with China stifled risk appetite, boosting demand for safe-haven assets. The metal ended the week down 2%.

The ISM reported US manufacturing, already weakened from last year's trade wars, contracted in April to its lowest reading since the financial crisis in April 2009. New factory orders were hit hardest, dropping by the most since 1951. The damage came as global commerce went into lock down to contain COVID-19.

President Trump announced that he considering new tariffs against China as punishment for its mishandling of the coronavirus outbreak by downplaying its severity. With supply chains already disrupted COVID-19, the new tariffs could create additional headwinds for companies trying to emerge from the pandemic.

Wall Street fell sharply on the news, with all three major US index dropping more than 2.5% as investors shifted toward safety. Treasurys rallied alongside gold, pushing yields lower.

An array of Fed officials came forward today with the same message: that the central bank will have to do more to rescue the economy. The Fed has already cut interest rates to near-zero, instituted unlimited quantitative easing, and created a $2 trillion loan operation to keep financial markets from collapsing.

Fed Chair Jerome Powell said earlier this week that the coronavirus shutdown has resulted in "damage to the productive capacity of the economy" that may last for two to three years. According to the Atlanta Fed's GDPNow estimate, GDP will contract more than 16% in the second quarter, after inflation.

The other precious metals were lower for the day and mixed for the week. Silver slipped 0.2% today and 2% this week. Platinum fell 4.8% to end the week nearly flat, down 10 cents. Palladium dropped 3.5% today for a weekly loss of 4.9%.

At the Comex close: June gained to $6.70 to $1,700.90; July silver slid 4 cents to $14.94; July platinum dropped $39.10 to $773.90; June palladium fell $68.20 to $1,887.80 an ounce.