Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up less than 0.1%, closing regular trading above $1,570, as safe-haven demand from coronavirus fears was largely offset by risk appetite driven by strong corporate earnings. The metal then extended its gains in electronic trade, rising above $1,576 after the Fed signaled low interest rates for the foreseeable future.

Worries about the virus continued to grip the markets as the total number of cases in China reached more than 6,000, surpassing the SARS epidemic in 2002-2003. Nearly 100 cases have been confirmed in other countries, including the US, France, Japan, Canada, and others.

Concerned about what a global pandemic could do to global growth, investors turned again to safe-haven assets like government bonds and gold. US Treasurys rallied, pushing down yields on benchmark 10-year notes. Yields on similar bonds from Germany, Italy, Spain, France, and the UK also fell.

Capping gold's gains, risk appetite also rose after several blue-chip US companies, including Apple and McDonalds, reported stronger than expected earnings. All three major US indexes picked up 0.2%.

Gold extended its gains in electronic trade after the Federal Reserve left interest rates unchanged in their first meeting of 2020. The post-meeting policy statement specified that rates will "remain on hold…for the foreseeable future."

Low interest rates are bullish for gold because they pressure the dollar and bond yields. A weaker dollar supports gold by making it less expensive in other currencies. Lower yields reduce the opportunity cost for owning gold, which offers no yield itself.

The other precious metals were most highly, with silver and palladium rising 0.2% and 0.8%, respectively, while platinum fell 2%.

At the Comex close: February gold added 60 cents, to $1,570.40; March silver rose 3 cents to $17.48; April platinum dropped $19.70 to $975.30; and March palladium gained $17.10 to $2,202.20 an ounce.