Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold held steady, edging up less than a dollar to close above $1,781, as worries about COVID-19 pulled investors into safe havens despite strong housing data and a sharp rally in equities.

Pending home sales soared more than 44% in May, the largest monthly increase on record, as buyers flocked back into housing market after April's shutdowns. While contract signings remain down 5% year-over-year, the surge signaled encouraging resiliency in the crucial housing sector.

Wall Street cheered the data, with the Dow jumping nearly 2% while the S&P 500 and Nasdaq rose around 1%. The Dow was further lifted by Boeing stock, which surged nearly on FAA approval of certification tests for its grounded 737 MAX jetliners.

Adding to risk appetite, traders widely expect further easing from the Fed and perhaps additional fiscal stimulus from Congress as the coronavirus pandemic heats back up. With the first $3 trillion federal aid package starting to ebb from the economy, the Senate will take up a second bill of the same size in July.

Monetary easing and fiscal stimulus flood the economy with dollars to promote lending and spending, buoying stock market valuations and encouraging risk appetite. At the same time, the expanding money supply increases the risk of currency devaluation, which can stoke demand gold as a hedge against long-term inflation.

Meanwhile, a sharp rise in coronavirus infections has caused an increasing number of states to reverse policies on reopening commerce. Arizona, Texas, Florida, and now California are shutting down bars and initiating tighter restrictions on other activities.

Health and Human Services Secretary Alex Azar told "Meet the Press" yesterday that the "window is closing" on the US opportunity for managing the pandemic.

Capping gold's gains, the dollar rose against major rivals on safe-haven inflows. A stronger dollar pressures gold and other commodities by making them more expensive overseas.

The other precious metals were mostly higher, with platinum and palladium rising 1.1% and 2%, respectively, while silver dipped 0.6%.

At the Comex close: August gold picked up 90 cents to $1,781.20; September silver, the most-active contract, dropped a dime to $18.06; October platinum added $8.90, to $828.20; and September palladium rose $38.70 to $1,933.10 an ounce.