Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold soared 3.1% to close above $1,644 after an emergency rate cut from the Federal Reserve triggered a selloff of stocks and drove investors into safe-haven assets.

In its first emergency meeting since the financial crisis, the Fed slashed interest rates by a half-point in hopes of containing the economic fallout from the spreading coronavirus. It was the largest single cut since December 2008, when the Fed reduced rates to zero and left them there for nine years.

In a press conference following the meeting, Fed Chair Jerome Powell warned that the COVID-19 epidemic poses an evolving risk to economic activity that is likely to continue for a long time.

After rising initially, Wall Street quickly sold off, with all three major indexes dropping 3% as the gravity of the economic threat began to sink in. Supply-side shocks like the one posed by the epidemic, when goods and services cease to be available, are typically less responsive to monetary easing than demand-shocks, when people choose not to spend.

The dollar fell to a six-week low, boosting gold and other commodities priced in it for global trade. The buck's major competitors are already at or near negative rates, so they have less room to cut, which will weigh on the dollar going forward.

Treasurys rallied alongside gold on fights to safety, pushing yield on benchmark 10-year notes to a new record lows near 1%.

The other precious metals were mostly higher, with silver and platinum rising 2.7% and 1.2%, respectively, while palladium lost 1.7%.

At the Comex close: April gold surged $49.60 to $1,644.40; May silver climbed 45 cents to $17.19; April platinum rose $9.90 to $869.30; and June palladium lost $40.20 to $2,387.50 an ounce.