Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 2.3% to close near $1,717 as stabilizing global markets prompted a retreat in bond yields and the dollar, lifting alternative stores of value.

The House of Representatives is expected to pass the Biden administration's 1.9% trillion Covid relief bill tomorrow, enabling the President to sign it into law this week. The huge aid program will provide additional support for the unemployed, small businesses, and local and state government as the economy recovers from the pandemic.

The global Organization for Economic Cooperation and Development said today that the Biden package is projected to nearly double US GDP this year, from 3.5% to 6.5%. In addition, the world economy should return to pre-pandemic levels by mid-year because of "demand spillovers" from the US stimulus.

Benchmark 10-year Treasury yields retreat from a 13-month high after Treasury Secretary Janet Yellen downplayed the likelihood of sharply higher inflation because of new stimulus. The former Fed Chair said again that the Biden package will drive a "very strong" recovery, but any significant rise in prices should be transitory.

Falling Treasury yields support gold by decreasing the opportunity cost for holding the metal, which offers no yield itself, instead of bonds as a safe-haven asset.

The dollar also retreated, with the ICE index falling 0.4%, as the prospects for a stronger global recovery drove demand for riskier currencies. A weaker dollar typically lifts gold and other commodities by making them less expensive overseas.

The other precious metals were mostly higher, with silver and platinum jumping 3.6% and 2%, respectively, while palladium slid 1%.

At the Comex close: April gold surged $38.90 to $1,716.90; May silver climbed 91 cents to $26.18; April platinum rose $23.10 to $1,175.40; and June palladium dropped $23 to $2,292.20 an ounce.