AGE Daily Gold Update

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

5/4/2020: Gold rises with trade-war tensions

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rose 0.7% to close above $1,713 as rising trade-war tensions between the US and China pressured equities and boosted demand for safe-haven assets. The metal has now gained 12% for the year.

Secretary of State Mike Pompeo claimed yesterday on talk shows that "a significant amount of evidence" suggests the coronavirus came from a lab in China. It was the latest round of increasingly acrimonious finger pointing between Washington and Beijing over the pandemic. China responded that he was "bluffing."

President Trump said last week that he may raise tariffs on China as punishment for its handling of the outbreak.

The Dow and S&P 500 spent much of the session in the red as traders, worried that last year's trade war could reignite and deepen the global recession, shifted into cash and safe havens. The indexes staged a late day rally, however, as bargain-hunters swept in to lift the Dow higher by 0.1% and the S&P 500 by 0.4%. The Nasdaq rose 1.2%.

Gold's gains came despite stronger dollar, which added 0.5% against major rivals on safe-haven inflows. A rising dollar typically pressures gold and other commodities priced in it for global trade by making them more expensive overseas.

Also supporting gold's rise, WTI crude surged 8% to more than $21 per barrel after the announcement of voluntary cuts in production by US producers. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed, with silver and palladium falling 1$ and 2.8%, respectively, while platinum added 0.6%.

At the Comex close: June gold gained $12.40, or 0.7%, to settle at $1,713.30; July silver lost 14 cents to $14.80; July platinum added $4.60, to $778.50; and June palladium dropped $52.50 to $1,835.30 an ounce.