Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 1.4% to close at a three-week high near $1,741 as rising unemployment and renewed trade-war worries with China pressured equities and drove investors toward safe havens.

Another 3 million Americans filed for first-time unemployment benefits last week as the coronavirus pandemic wreaked further damage on the labor market despite the gradual reopening of the US economy.

In the past two months, more than 33 million people have applied for state-channeled benefits and another 5 million through special federal programs, bringing the total to around 39 million–more than 20% of all employees before the pandemic hit.

The staggering unemployment level is a key reason why Fed Chair Jerome Powell said yesterday the economy is in for an "extended period of weakness," and "the recovery may come more slowly than we would like."

Other Fed officials have echoed Powell's grim assessment this week. Minneapolis Fed President Neel Kashkari said today the recovery will be long and drawn out, and "the V-shaped recovery is off the table." St. Louis Fed President James Bullard warned of a new Great Depression with businesses failing "on a grand scale."

Adding to economic anxiety, President Trump said he is breaking off further trade negotiations with China because of his disagreement with its handling of the coronavirus outbreak

Equities struggled with the deepening trade tensions and jobless claims, with all three major US indexes posting early losses before turning to gains later in the session. Bargain-hunting and the relaxation of stay-at-home requirements in some states whetted risk appetite, lifting the Dow 1% while the S&P 500 added 0.5%.

US Treasury's gained along with gold on flight to safety, further depressing yields.

Gold was also supported by sharply higher oil prices. WTI crude jumped another 8.2% to more than $27.30 per barrel after the IEA forecasted a tightening supply picture later in the year. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also higher, with silver climbing 3.1% while platinum and palladium picked up 0.7% and 0.4%, respectively.

At the Comex close: June gold gained $24.50 to $1,740.90; July silver jumped 49 cents to $16.16; July platinum added $5.20, to $775; and June palladium rose $7.50 at $1,798.20 an ounce.