AGE Daily Gold Update

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

2/21/2020: Gold surges 1.8% to 7-year high

Source: Bill Musgrave, American Gold Exchange

Austin — Gold surged 1.8% to close at a seven-year high near $1,649 as weak US data and the spreading COVID-19 pandemic drove investors to shed risk and pile into safe-haven assets. The metal has now rallied for eight straight sessions, posting a weekly rise of 3.9%, its strongest since last June.

IHS Markit Purchase Managers Index for service-oriented businesses fell in February to the lowest level since 2013, signaling contraction in this key sector for the first time since 2016. Manufacturing fell to its lowest level in six months, barely escaping contraction.

Comprising around nearly 70% of the economy, the services sector has been a bulwark against recession over the past 18 months as trade wars have damaged manufacturing and slowed growth. Both sectors reported concerns about the impact of the coronavirus as the main drivers of weakness.

Separately, the National Association of Realtors said existing home sales fell by 1.3% in January, mainly because of inventory shortages.

Equity markets plunged on the combination of weak data and pandemic fears, with the Dow and Global Dow falling 1% while the tech-heavy Nasdaq plunged 2%.

Treasury yields fell for a fifth day, with 30-year yields dropping to an all-time low, as investors sought safety in government bonds and gold.

The dollar receded from a three-year high, dropping 0.5% on rallies in safe-haven currencies like the yen and Swiss franc. A weaker dollar typically lifts gold and other commodities priced in it for global trade by making them cheaper in other currencies.

The other precious metals were mixed for the day and higher for the week. Silver climbed 1.2% for a weekly rise of 4.5%, the most since August. Platinum slipped 0.3% but held a weekly rise of 0.8%. Palladium added another 1.2% today and 12.5% this week.

At the Comex close: April surged $28.30 to $1,648.80; March silver climbed 21 cents to 18.53; April platinum dipped $2.90 to $976.10; and March palladium rose $31.50 to $2,605.40 an ounce.