AGE Daily Gold Update

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

2/27/2020: Gold ends flat after early rise

Source: Bill Musgrave, American Gold Exchange

Austin — Gold ended nearly flat on Comex in choppy trade, dipping 60 cents to close at $1,642.50. The metal traded above $1,662 earlier in the session on deepening fears about the impact the coronavirus, only to recede as futures traders took short-term profits.

For the first time, new COVID-19 cases outside of China have surpassed those within China itself, confirming fears that the epidemic has gone global. South Korea, Italy, and Iran have sharply higher rates of infection; Brazil has reported its first case; and the US, with 60 confirmed, has reported a new infection that has no known connection to China.

Wall Street tumbled for the sixth straight day, with all three major indexes losing around 4.5%. The S&P 500 is down more than 11% and Nasdaq 12% from their peaks less than two weeks ago. Blue Chips like Microsoft and Best Buy have joined Apple in warning about falling earnings because of supply disruptions.

The dollar fell 0.5% against major rivals as traders speculate that the Fed will have to slash interest rates to offset slower growth and falling inflation because of the coronavirus. The likelihood of a quarter-point cut in March has jumped from 33% to nearly 60% in the past 24 hours, according to CME FedWatch. By June, the odds are now 95% for a quarter point and 77% for at least a half-point reduction.

Lower rates tend to weaken the dollar by making it less attractive to Forex investors seeking higher yield. A weaker dollar, in turn, supports gold and other commodities priced in dollars for foreign trade by making them more expensive in other currencies.

The other precious metals were mostly lower, with silver and platinum dropping 1% each while palladium added another 1.7% on global supply shortages.

At the Comex close: April gold dipped 60 cents to $1,642.50; May silver fell 18 cents to $17.74; April platinum lost $9.30 to $905.50; and June palladium rose $44.90 to $2,711.70 an ounce, a new record.