Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged another 0.8% to close at $1,782, the highest level since October 2012, as climbing COVID-19 cases and faltering US-China trade relations boosted demand for safe havens despite upbeat economic data. The metal has climbed nearly 3% over the past three sessions.

More than half of US states reported sharp increases in coronavirus cases and hospitalization this week, threatening to snuff out progress in the economic recovery. The biggest spikes have come in the South and West, with Texas surpassing 5,000 case in a single day for the first time. More than 2.3 million Americans have been infected with a death toll exceeding 120,000.

The news put a damper on some otherwise encouraging economic reports. Markit's flash PMI for June showed both services and manufacturing rising to four-month highs. Although they remained in contraction, the sectors signaled a rebound in business activity that could lead to a V-shaped recovery.

Separately, sales of new homes jumped more than 16% in May, suggesting that a rebound in the crucial housing market may also be coming.

Wall Street rose on the upbeat data, capping gold's gains. The Dow and S&P 500 added 0.5% while the Nasdaq picked up 0.7%.

The dollar fell another 0.3% against major rivals, supporting gold and other commodities priced in it for global trade. The effects of monetary stimulus from the Fed is beginning to weigh on the buck, which is bullish for gold.

Stephen Roach, Yale economist and former chairman of Morgan Stanley Asia, warned again today that the dollar is likely to decline 35% in the near future, ending its privileged status as the global reserve currency. He cited unprecedented easing by the Fed, federal debt and deficits, and the decline national savings rate as reasons in an interview with MarketWatch.

Also spurring some haven demand, White House trade director Peter Navarro asserted late yesterday that the trade agreement with China is "over." While the Trump administration has gone to lengths to walk it back, and Navarro himself has said it was taken out of context, the statement sent jitters through the markets.

The other precious metals were also higher, with silver rising 0.9% while platinum and palladium climber 0.3% and 0.5%, respectively.

At the Comex close: August gold gained $15.60 to $1,782; July silver rose 16 cents to $18.06; July platinum picked up $2.70 to $846.40; and September palladium added $9, to $1,951.10 an ounce.