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AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.


1/2/2020: Gold gains for seventh session

Source: Bill Musgrave, American Gold Exchange

Austin — Gold added another 0.3% to close at a three-month high above $1,528 as economic stimulus from China and worries about the sustainability of gains in the US stock market stoked demand for alternative assets. It was the metal's seventh straight winning session, the longest streak since early June.

Gold gained 18.9% in 2019 for its best year since 2010. Silver climbed 15.5% for its best annual increase since 2016.

Beijing injected around $115 billion into the Chinese financial system yesterday, hoping to revive growth in the world's second-largest economy. The stimulus takes the form of a cut in the reserve requirements for banks, allowing them to extend more credit to consumers and businesses.

China joins a long list of major economies seeking to boost growth through monetary easing. The European Central Bank recently announced a stimulus package of $25 billion per month. The US Federal reserve cut interest rates three times last year, and dozens of other central banks have taken similar measures.

Monetary easing on a global scale is bullish for gold because it devalues currencies, reducing purchasing power and promoting inflation. Gold has a long history as a hedge against inflation and monetary risk, which is one reason global central banks added record amounts of gold to their currency reserves over the past two years.

Gold's gains came despite higher US stock markets, which rose to new records on the news of China's stimulus. The Dow added 0.8% while the Nasdaq rose 1%.

Adding to both risk appetite and haven demand, President Trump announced that the phase one accord with China will be signed on January 15. However, details about the limited pact have yet to be announced, leading many investors to question its likely impact on the 18-month long trade war.

The other precious metals were also higher, with silver rising 0.7% while platinum and palladium added 0.7% and 1%, respectively.

Art the Comex close: February gold gained $5 to $1,528.10; March silver added 13 cents, to $18.05; April platinum picked up $7.20 to $985; and March palladium rose $18.70 to $1,928 an ounce.

  

Metal Ask      Change
Gold $2,212.89           Price Change Up Arrow $12.10
Silver $24.73           Price Change Down Arrow $-0.09
Platinum $911.88           Price Change Up Arrow $1.52
Palladium $1,039.89           Price Change Up Arrow $11.30
In US Dollars