Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 1.1% to close above $1,651 after a record surge in unemployment claims spurred expectations of deeper monetary easing from the Fed, undercutting the dollar and lifting demand for alternative assets.

More than 3.2 million Americans filed for unemployment benefits last week, the most ever, as businesses across the nation shut down to impede the spread of COVID-19.

Fed Chair Jerome Powell, in a highly unusual interview on NBC's Today Show, said the U.S. "may well be in recession" already, and the economy cannot function normally until the pandemic is controlled. Powell added that the central bank stands ready to deliver more monetary stimulus if needs be.

Last week, the Fed launched unlimited quantitative easing to inject liquidity into financial markets that were on the verge of seizing up. This unprecedented emergency action came just days after interest rates were slashed to near-zero for the first time since the financial crisis in 2008.

Tantamount to printing money, QE floods the economy with cheap dollars to promote spending and lending. Gold thrives in this environment as a hedge against currency debasement and inflationary pressures. It rose to an all-time high above $1,900 in 2011 behind three waves of limited QE.

The dollar fell 1.6% against major rivals as traders speculated that deeper easing from the Fed will further depress the currency. A weaker dollar supports gold and other commodities priced in it for global trade by making them less expensive overseas.

Equities rose for a third session behind expectations for additional easing and the passage of a $2 trillion stimulus package by the Senate. The House still needs to vote.

The other precious metals were lower, with sliver dropping 1.3% while platinum and palladium lost 1.1% and 1%, respectively.

At the Comex close: April gold gained $17.80 to $1,651.20; May silver dropped 20 cents at $14.68; April platinum fell $8.40 to $737.10; and June palladium slid $21.50 to $2,226.10 an ounce.