AGE Daily Gold Update

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

2/4/2020: Gold drops on surging risk rally

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dropped 1.6% to close under $1,556 as economic stimulus from China fueled risk appetite for a second session, boosting stocks and the dollar at the expense of alternative assets. It was the metal's lowest close in two weeks.

To offset the economic fallout of the coronavirus pandemic, the People's Bank of China has cut interest rates and committed to pumping more than $170 billion into China's economy. Policy makers have signaled a willingness to do whatever it takes to stabilize Chinese equity markets, which lost more than $400 billion in value at opening yesterday.

Global equities have surged in response to Beijing's efforts, with the Dow and Global rising 1.7% today while the tech-heavy Nasdaq, comprised of many firms with Chinese supply chains, jumped 2.2%

The dollar added another 0.2% as safe-haven currencies like the yen and Swiss franc lost ground for a second day. A stronger dollar pressures gold and other commodities by making them pricier overseas.

While investor anxiety over the coronavirus has been medicated by Chinese stimulus, the pandemic itself rages on. More than 20,000 cases have now been reported, with the death toll of 420 in China.

The other precious metals were mostly lower, with silver and platinum slipping 0.6% and 0.6%, respectively, while palladium climbed 4.6%.

At the Comex close: April gold dropped $26.90 to $1,555.50; March silver fell 11 cents to $17.51; April platinum slid $4.60 to $97080; and March palladium surged $102.10 to $2335.60 an ounce.