AGE Daily Gold Update

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

2/10/2020: Gold climbs for fourth session

Source: Bill Musgrave, American Gold Exchange

Austin — Gold climbed 0.4% to close at a one-week high near $1,580 as the spreading coronavirus spurred demand for safe havens despite gains in stocks and the dollar. It was the metal's fourth straight winning session.

With more than 40,000 cases now confirmed and a death toll exceeding 900, more than SARS in 2003, the coronavirus pandemic continues to preoccupy global markets. While the spread beyond China has been slow thus far, with around 320 cases and one death reported in 24 other countries, this may be head "the tip of the iceberg," warned the head of the World Health Organization today.

US 10-year Treasury note rallied alongside gold on flights to safety, pushing down yields. Benchmark government bonds in Germany, Spain, Britain, and Japan also rose.

The dollar picked up 0.2% against major rivals, hitting a fourth-month high against the euro, on safe-heavens inflows. Weak eurozone data added to the dollar preference, after recent industrial output in Germany and Italy was much softer than expected.

Wall Street largely shook off virus concerns as a slew of reported earnings beat forecasts. The Dow added 0.6% while the Nasdaq leapt 1.1%.

Boosting both risk appetite and demand for gold, traders increasingly expect the Fed to step in with lower interest rates if the pandemic stymies US growth. CME FedWatch reports the odds of a June rate cut have increased to slightly more than 50%, up from 45% yesterday and 28% one month ago.

Lower rates increase the amount of cheap liquidity in the markets, reducing the cost of business and encouraging risk. At the same time, they pressure the dollar by reducing yield, supporting gold and other commodities priced in dollar for global trade by making them less expensive in other currencies.

The other precious metals were mostly higher, with silver and palladium rising 0.5% and 1.8%, respectively, while platinum slid 0.2%.

At the Comex close: April gold climbed $6.10 to $1,579.50; March silver picked up 9 cents to $17.79; April platinum slipped $2.30 to $966.90; and March palladium rose $39.60 to $2,249.80 an ounce.