AGE Daily Gold Update

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

2/25/2020: Gold falls on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 1.6% to close at $1,650 as traders took profits despite sharply lower equities. The metal had risen 6.5% over a nine-session rally that propelled it to a seven-year high of $1,676.

Global equity markets crumbled as spread of the coronavirus outside of China stoked fears of a global recession. Iran, Italy, and South Korea have seen a sharp rise in confirmed cases in the past few days, leading officials to question whether the epidemic can be contained. The Dow fell more than 3% for a second session, tallying its worst two-day slide, while the Global Dow plunged 5.2%.

Treasury bonds rallied as investors sought safety, pushing yields on benchmark 10-year notes to a new record low.

The dollar fell another 0.4% against major rivals as traders speculated that the Federal Reserve is likely to reduce interest rates to offset fallout from the coronavirus. CME FedWatch puts the odds of at least one rate cut by June at 81%, down from 47% one week ago.

Falling interest rates are bullish for gold because they weaken the dollar and thereby make gold less expensive in other currencies, boosting global demand.

The other precious metals were mostly lower, with silver and platinum dropping 3.6% and 4.3%, respectively, while palladium rebounded from yesterday's 3.2% fall by adding 5%.

At the Comex close: April gold gave back $26.60 to $1,650; March silver fell 69 cents to $18.19; April platinum fell $41.90 to $932.30; and March palladium climbed $126.50 to $2,647.80 an ounce.