AGE Daily Gold Update

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

2/19/2020: Gold rises on safe-haven inflows

Source: Bill Musgrave, American Gold Exchange

Austin — Following yesterday's 1.1% surged, gold gained another 0.4% to close near $1,610 as ongoing coronavirus concerns offset rallies in stocks and the dollar to spur safe-haven demand. It was the metal's highest finish since March 2013.

Risk appetite returned to Wall Street after China reported fewer new cases on COVID-19, the deadly coronavirus that has closed factories and disrupted global supply chains. While official Chinese statistics are often considered suspect, the 1,750 new cases reported would be the smallest daily increase in more than two weeks.

US equities surged on the upbeat news, with the Dow adding 0.5% and the tech-heavy Nasdaq, more dependent on Chinese factories, added 1%.

Expectations for more monetary stimulus in Asia also boosted risk appetite. China will reportedly inject yet more cash into its economy to offset coronavirus damage, especially to airlines, which have been hammered by travel restrictions. This follows $175 billion in stimulus announced two weeks ago and a reduction in medium term interest rates.

The dollar climbed to a three-year high against major rivals as the yen tumbled 1.5% on easing coronavirus worries and rising concerns about Japan's economy, which shrank at the fastest pace in six year in December. A stronger dollar typically weighs on gold by making it more expensive overseas.

Gold was also supported by rising oil prices, which finished near a three-week high after the US imposed sanctions on a division of Russian oil giant Rosneft, adding to supply concerns. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Wholesale inflation rose sharply in January, with the PPI increasing 0.5%, the biggest monthly increase since late 2018. But analysts attributed much of the spike to transient causes like temporary trade margins that will not raise costs in the longer run.

The other precious metals were also higher, with silver rising 0.6% while platinum and palladium added 1.3% and 3.9%, respectively.

At the Comex close: April gold gained $6 to $1,609.60; March silver rose 12 cents to $18.27; April platinum rose $10.60 to $1,006.30; March palladium jumped another $73.60 to $2,594.90 an ounce, a record.