Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold tumbled 3.2% to close under $1,591 as coronavirus anxiety turned to near-panic, forcing a massive sell-off in virtually every asset class as investors horde cash. The metal has now declined more than 5% over the past three sessions, reaching a two-week low.

US and global equity markets plunged deeply into bear territory after President Trump, in a televised speech about the crisis last night, suspended travel from the European Union as a measure to combat further spread of COVID-19.

The surprising move disappointed traders hoping for a broader health and economic response, driving all three major US indexes down by more than 9% in to bear-market losses. Trading was suspended for 15 minutes just after opening to stem the losses.

The Global Dow dumped more than 12%, pushing it, too, into a bear market, which is defined as a drop of 20% from recent peaks.

The Fed announced new policies to ease "highly unusual disruptions" in the US Treasury financing markets and provide emergency liquidity. The central bank will expand its balance sheet by purchasing Treasury notes and bonds, like quantitative easing, and take other short-term measures to prevent markets from seizing up. The move follows last week's emergency half-point reduction in interest rates.

The European Central Bank also announced additional stimulus measures to add liquidity, including the elimination of capital requirements for banks providing loans, but failed to provide rate cuts.

The dollar surged 1% after Forex traders, disappointed in the ECB response, dumped euros and shifted into safer currencies like the yen and buck. A rising dollar pressures gold and other commodities by making them more expensive overseas.

Oil dropped another 5% as the travel ban exacerbated concerns about global demand. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals fell even harder, with silver dropping 4.6% while platinum and palladium lost 10% and 14.1%, respectively.

Used in auto manufacturing, platinum and palladium are especially vulnerable to the downturn in global growth expected because of COVID-19. In addition, a recent technology breakthrough that reduces the amount of metal needed in catalytic converters is taking its toll on the metals.

At the Comex close: April gold fell $52 to $1,590.30; May silver shed 77 cents to $16.01; April platinum slid $86.40 to $781.80; and June palladium jettisoned $314.40 to $1,914.90 an ounce.