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


4/6/2020: Gold soars to 7-year high

Source: Bill Musgrave, American Gold Exchange

Austin — Gold soared 2.9% to close at a 7-year high near $1,694 as investors sought protection from the economic consequences of the coronavirus pandemic. Underscoring pent-up demand, the strong rally came despite headwinds from a surge in equities.

All three major US stock indexes rose sharply on hopes that the spread of COVID-19 might be leveling off in some deeply affected areas, pulling bargain-hunters back into the markets. The Dow added 7.7% while the S&P 500 climbed 7% and the Nasdaq 7.3%.

New York, the hardest hit state in the US, reported its death rate has plateaued and hospitalizations have decreased. Deaths have also fallen in Spain, Italy, France, and Germany, which are collectively considered a proxy for the pandemic's likely progress in the US.

The news was not so positive in parts of Asia, however, where infections and death rates have risen. Japan will declare a state of emergency for Tokyo and six other regions, while the Bank of Japan is preparing a stimulus package of nearly $1 trillion to cushion the economic impact.

In ordinary times, today's extreme upsurge in risk appetite would pull money away from safe-haven investments like gold. But these times, of course, are anything but ordinary.

The extraordinary amounts of monetary stimulus being unleashed by governments should help to prevent a deep and nasty global recession. But the unprecedented easing is also exploding the global money supply and drastically diluting currencies, raising the specter of sharply higher inflation once the pandemic passes.

Gold is seen as a go-to asset in this environment for protection against currency devaluation and loss of purchasing power. As investors turn hopeful that the pandemic may soon damp out, they are beginning to let go of hoarded cash. Some is going toward risk, some towards safety, driving stocks and gold higher simultaneously.

The other precious metals were mostly higher, with silver and platinum jumping 4.7% and 1.0%, respectively, while palladium slid 1.4%.

At the Comex close: June gold surged $48.20 to $1,693.90; May jumped 68 cents to $15.17; July platinum rose $13.90 to $732; and June palladium dropped $29.20 to $2,076.80 an ounce.


4/3/2020: Gold gains on steep payrolls decline

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.5% to close above $1,645 after the US labor market fell into contraction for the first time in nearly 10 years, fueling demand for safe-haven assets. The metal ended the week down 0.5% as a sustained rally in the dollar, also driven by safe-haven demand, created headwinds for alternative stores of value.

US nonfarm payrolls shed 701,000 jobs in March as the COVID-19 pandemic swept the nation, causing businesses to shutter and commerce to grind nearly to a halt. It was the biggest decline in 11 years, abruptly ending 113 straight months of employment growth.

With 10 million new claims for unemployment benefits filed in the past two weeks, however, the March job losses are likely the tip of the iceberg.

In somewhat more positive economic news, the ISM services index continued to expand in March, although at the slowest rate since August 2016. As similar survey by IHS Markit reported the deepest decline in the index's history, pushing the sector into steep contraction.

In the Eurozone, the IHS Markit PMI plunged to the lowest level in the survey's history, dating back to 1998.

Wall Street fell on the abysmal jobs data, with all three indexes losing 2.2%. The S&P 500 has now fallen 27% since its mid-February peak, erasing more than $7 trillion in wealth.

Yields on Benchmark 10-year Treasurys fell to 0.604% on the jobs data and held those losses after the ISM services report.

Capping gold's gains, the dollar rose 0.4% against major rivals as global investors rushed for the safety of the US currency and Treasurys, which much be purchased in dollars. The buck closed the week with a gain of 2.5%, pressuring gold and other commodities priced in it for global trade by making them more expensive in other currencies.

The other precious metals were lower for the day and week. Silver fell 1.1% for a weekly decline of 0.3%. Platinum fell 1.6% today and 3% this week. Palladium slid 0.7% for a weekly loss of 4%.

At the Comex close: June gold gained $8 to $1,645.70; May silver dropped 16 cents to $14.49; July platinum lost $11.90 to $718.10; and June palladium fell $15.70 to $2,106 an ounce.


4/2/2020: Gold rallies on haven demand

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rallied 2.9% to close near $1,638 as shocking job losses due to COVID-19, and grim economic projections from the CBO boosted demand for safe havens.

The accelerating spread of coronavirus is driving the US economy into a sharp recession, with more than 6.6 million Americans filing for first-time unemployment benefits last week, the most ever. More than 10 million new claims have been file in the past two weeks alone.

The Congressional Budget Office said today the unemployment rate will exceed 10% in the second quarter, and GDP will contract by more than 7%, based on information available through March 27. Dallas Fed President Robert Kaplan said today the unemployment rate is likely to be 15%.

WTI crude oil rocketed nearly 25% higher on hopes for supply cuts as Russia and Saudi Arabia are reportedly on the cusp of ending their price war. President Trump tweeted that the two major producers are expected to cut output by 10 to 15 million barrels, alleviating a global supply glut that sent US benchmark oil prices 65$ lower during the first quarter.

Gold often trade in sympathy with oil as a hedge against energy-related inflation.

Led by energy shares, Wall Street rallied on the surge in crude, with the Dow and S&P 500 rising 2.2%.

Creating headwinds for gold, the dollar rose another 0.5% against major rivals as the prospect of a long and painful global contraction pushed Forex traders toward the perceived safety of the world's de facto reserve currency. A rising dollar tends to weigh on gold and other commodities by making them more expensive overseas.

The other precious metals were mostly higher, with silver and platinum rising 4.8% and 1.7% while palladium dropped 0.9%.

At the Comex close: June gold gained $46.30 to $1,637.70; May silver surged 67 cents to $14.65; July platinum added $12.20, to $730; and June palladium dropped $19.10 to $2,121.70 an ounce.


4/1/2020: Gold slips on stronger dollar

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.3% to close under $1,591 as the first waves of coronavirus-influenced economic data drove investors into cash, lifting the dollar and pressuring alternative stores of value. Selloffs in equity markets drove further liquidation, offsetting safe-haven demand as traders scrambled to cover margin calls.

Private-sector employers cut 27,000 jobs in March, with increasing numbers of businesses shuttered because of COVID-19. While the number was well below forecasts, it is seen as a harbinger of deeper job losses to come. More than 3 million Americans filed for first-time unemployment benefits last week alone.

Manufacturing is starting to register the impact of closures. Factories saw their largest drop in new orders in 11 years, according to the ISM, and employment in the sector fell to an 11-year low in March.

US manufacturing is far from alone in feeling the pain. Factory output in the UK, Germany, Japan, and South Korea have also tumbled to multi-year lows despite unprecedented monetary easing from global central banks.

After suffering one of its worst quarters in history, Wall Street tumbled again on the grim data, with all three major US indexes dumping another 4%. S&P 500 companies have now surrendered $6.7 trillion in market value this year, according to Reuters. Goldman Sachs projects US GDP to fall an annualized 34% in Q2.

The dollar rallied 0.5%, pressuring gold and other commodities priced in it for global trade by making them more expensive on other currencies. The prospect of a protracted global recession is fueling international demand for US Treasury bonds and notes, which must be purchased in dollars.

The other precious metals were also lower, with silver dropped 1.2% while platinum and palladium fell 1.7% and 7.1%, respectively.

At the Comex close: June gold slid $5.20 to $1,591.40; May silver dropped settled 17 cents to $13.98; July platinum shed $12.20 to $717.80; and June palladium lost $174 to $2,140.80 an ounce.


3/31/2020: Gold scores 4.8% quarterly gain

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 2.8% to close at a one-week low under $1,597 as better-than-expected economic data from the US and China eroded safe-haven demand. The metal still gained 1.9% for the month and 4.8% for the quarter, scoring its sixth straight quarterly rise.

US consumer confidence fell in March from 132 to 120 in the Conference Board index as the scope of the coronavirus pandemic came into focus for American households. While the reading was the lowest in 32 months, it was nonetheless better than most economists were forecasting.

Manufacturing and non-manufacturing activity in China rebounded sharply in March, offering some hope that other economies may come back quickly once the spread of COVID-19 is contained. The official services PMI climbed from under 30 to 52, while manufacturing rose from 35 to 52, where anything above 50 means expansion.

Despite the somewhat upbeat data, US equities fell again as investors shifted toward cash, with the Dow dropping 1.8% while the S&P 500 lost 1.6%. Both indexes ended the quarter with losses exceeding 20%, plunging them firmly into bear territory as investors grew fearful of a lasting recession because of the coronavirus.

The dollar rose against the euro and Swiss franc but slipped against other major rivals on concerns that massive monetary easing from the Fed will undercut the currency in the longer term. The buck still rose 2.8% for the quarter, capping gold's gains, on safe-haven inflows.

The other precious metals were higher for the day and lower for the quarter. Silver added 0.2% today but lost 21% in Q1. Platinum climbed 0.8% for the session but fell 21% for the quarter. Palladium jumped 4.9% today but shed 8% this quarter.

At the Comex close: June gold dropped $46.60 to $1,596.60; May silver picked up 2 cents to $14.16; July platinum added $61.0, to $729.90; and June palladium climbed $107.20 to $2,304.80 an ounce.


3/30/2020: Gold eases on new COVID guidelines

Source: Bill Musgrave, American Gold Exchange

Austin — Gold eased 0.7% to close under $1,644 as revised Federal guidelines for containing the coronavirus lifted risk appetite, rallying equities and reducing demand for safe-haven assets.

President Trump said he is extending guidelines for social distancing until the end of April to stall the spread of COVID-19. The statement revised his earlier goal of reopening the country for business by Easter, something health experts and scientist agreed would be counterproductive to containment.

Wall Street cheered the change in approach, with the Dow rising 2.9% while the S&P 500 and Nasdaq picked up 3.2%. Shifting from defense to offense, traders took profits from last week's 10% gold rally to bargain-hunt in risk assets.

The dollar also rebounded, rising 0.8% against major rivals as global central banks stepped up their easing and stimulus programs. China cut a key interest rate and Singapore moved aggressively today to increase liquidity and cushion economic losses. Japan, the eurozone, and the UK have all joined in the coordinated monetary easing.

Oil plunged 6.5%, with WTI crude dipping temporarily under the psychologically important $20 per barrel level. Falling global demand due to the coronavirus, combined with a price war between Russia and Saudi Arabia, has generated a global supply glut driving prices to an 18-year low.

The other precious metals were mostly lower, with silver and platinum dropping 2.8% and 2.4%, respectively, while palladium inched up less than 0.1%.

At the Comex close: June gold fell $10.90 to $1,643.20; May silver lost 40 cents to $14.13; July platinum dropped $17.80 to $723.80; and June palladium added 80 cents, to $2,197.60 an ounce.


3/27/2020: Gold slides, notches 10% weekly win

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 1.6% to close at $1,625 as traders took profits from this week's sharp rally to cover stock market losses. Surging nearly 10% since last Friday, the metal notched its biggest weekly win since September 2008, when the collapse of Lehman Brothers launched the global financial crisis.

Silver dropped 1% to close at $14.53, also on profit-taking, but posted a weekly rise of 17%, its biggest in 33 years.

With confirmed cases of COVID-19 now exceeding 85,000, the US has surpassed China and Italy for most in the world. Businesses have shuttered; entire industries, like airline travel and hotels, have slowed to a crawl; and unemployment has skyrocketed above 3.2 million this week alone.

Against this backdrop, the House of Representatives today passed the Senate's $2.2 trillion aid package intended to cushion individuals and companies from the inevitable recession. President Trump is expected to sign it quickly into law.

The bailout follows this week's announcement of unlimited quantitative easing from the Federal Reserve, which will flood markets with cheap liquidity to promote lending and spending.

These historic and unprecedented emergency measures come a week after interest rates were slashed to near zero for the first time since 2009. Gold rallied in response as investors sought protection from currency debasement and economic turmoil.

Even with help on the way, Wall Street fell sharply as investors fear the uncertainty facing the US economy. The Dow dropped 4% while the S&P 500 and Nasdaq lost 3.3% and 3.7%, respectively.

Despite today's losses, all three indexes finished around 20% higher for the week, rebounding from historic plunges on monetary easing and the promise of bailout money from Congress. Yet they remain in bear markets, down more than 20% from their recent peaks in February.

As we've seen several times in recent weeks, today's stock selloff prompted liquidations in the gold and silver markets to cover margin calls on leveraged equity investments. Considered currencies of last resort, these metals are highly liquid and readily tapped for instant cash.

Also pressuring gold, the dollar rebounded 1% against major rivals as coordinated monetary easing by other central banks weakened their currencies. The buck still lost around 4% for the week for its worst weekly performance in four years.

The other precious metals were mixed for the day but higher for the week. Platinum rose 0.4% today and 19% this week, while palladium lost 1.3% today but jumped 42% this week. Both PMGs were lifted by mine shutdowns in South Africa and Russia due to COVID-19.

At the Comex close: April gold slid $26.20 to $1,625; May silver fell 14 cents to $14.53; April platinum picked up $3.20 to $740.30; June palladium lost $29.30 to $2,196.80 an ounce.


3/26/2020: Gold rises with unemployment surge

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rose 1.1% to close above $1,651 after a record surge in unemployment claims spurred expectations of deeper monetary easing from the Fed, undercutting the dollar and lifting demand for alternative assets.

More than 3.2 million Americans filed for unemployment benefits last week, the most ever, as businesses across the nation shut down to impede the spread of COVID-19.

Fed Chair Jerome Powell, in a highly unusual interview on NBC's Today Show, said the U.S. "may well be in recession" already, and the economy cannot function normally until the pandemic is controlled. Powell added that the central bank stands ready to deliver more monetary stimulus if needs be.

Last week, the Fed launched unlimited quantitative easing to inject liquidity into financial markets that were on the verge of seizing up. This unprecedented emergency action came just days after interest rates were slashed to near-zero for the first time since the financial crisis in 2008.

Tantamount to printing money, QE floods the economy with cheap dollars to promote spending and lending. Gold thrives in this environment as a hedge against currency debasement and inflationary pressures. It rose to an all-time high above $1,900 in 2011 behind three waves of limited QE.

The dollar fell 1.6% against major rivals as traders speculated that deeper easing from the Fed will further depress the currency. A weaker dollar supports gold and other commodities priced in it for global trade by making them less expensive overseas.

Equities rose for a third session behind expectations for additional easing and the passage of a $2 trillion stimulus package by the Senate. The House still needs to vote.

The other precious metals were lower, with sliver dropping 1.3% while platinum and palladium lost 1.1% and 1%, respectively.

At the Comex close: April gold gained $17.80 to $1,651.20; May silver dropped 20 cents at $14.68; April platinum fell $8.40 to $737.10; and June palladium slid $21.50 to $2,226.10 an ounce.


3/25/2020: Gold slides on stimulus hopes

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 1.7% to close under $1,634 on profit-taking as Wall Street rose for a second day behind hopes for a historic stimulus package. The metal had rallied more than 11% over the previous two sessions.

The Senate is close to passing to an unprecedented $2 trillion bailout to cushion the US economy from the devastating coronavirus pandemic. The massive spending package includes direct payments of $1,200 to citizens, expanded unemployment benefits, a $367 billion loan program for small business, and a $500 billion lending fund for states, cities, and industries.

Equities rallied for a second day behind the stimulus plan, with Dow and S&P 500 rising 2.4% and 1.3%, respectively, as investors shifted from safety toward risk.

Limiting gold's slide, the dollar fell another 1.1% against major rivals as the Fed's declaration of unlimited quantitative easing this week continued to reduce liquidity crunches in dollar-funded cash markets. A weaker dollar supports gold and other precious metals by making them less expensive in other currencies.

Gold supply shortages are building because of COVID-19. Demand for the metal as the currency of last resort has risen dramatically in recent weeks, causing several national mints to interrupt production of bullion coins. At the same time, three major refiners in Switzerland closed this week because of shelter-in-place orders.

The other precious metals were sharply higher. Silver and platinum rose 4.3% and 6.2% respectively, while palladium rocketed 25.8% higher because of mine closures in South Africa, the world's leading producer.

At the Comex close: April gold slid $27.40 to $1,633.40; May silver gained 62 cents to $14.87; April platinum picked up $43.80 to $745.50; and June palladium jumped $460.70 to $2,247.60 an ounce.


3/24/2020: Gold leaps 6% higher on Fed easing

Source: Bill Musgrave, American Gold Exchange

Austin — Gold leapt another 6% to close above $1,660 as the Fed's new easing programs and hopes for a stimulus package from Congress stoked demand for the metal as a hedge against currency debasement. Coming a day after jumping 5.6%, it was the metal's biggest one-day percentage gain since March 2009.

The Federal Reserve stunned markets yesterday by announcing an unprecedented program of monetary easing, including unlimited purchases of government and corporate bonds, known as quantitative easing. Their goal is to prevent markets from seizing under the strain of the coronavirus pandemic, thereby limiting damage to the economy.

Tantamount to printing money, QE effectively floods the US and global financial systems with cheap cash, enabling banks to loan money and exchange markets to function smoothly.

Separately, Congress is reportedly nearing agreement on a $2 trillion stimulus package that will provide aid to workers and companies. This plan will add even more liquidity to the markets through loans, tax breaks, and outright gifts of cash.

Equity markets rallied sharply on the hope that the stimulus package will lift the economy. The Dow jumped more than 10% while the Global Dow added 8%.

The dollar fell for a second session, dropping another 0.3% against major rivals, supporting gold and other commodities priced in it for global trade.

Gold's stunning, two-day surge of $175 brings it close to levels before US stock markets crashed two weeks ago. Margin calls on plunging stocks had forced desperate traders to find cash wherever they could. Gold, being one of the most liquid assets, was an easy target.

Now with QE and stimulus packages in the pipeline, those liquidity crunches are vastly reduced, allowing gold to trade more naturally as a safe-haven asset.

In addition, the Fed's extreme easing plans are creating additional demand for gold as a hedge against currency devaluation. In 2011, following three waves of limited QE, gold rose to its all- time high above $1,900 as the dollar weakened and concerns about inflation increased.

Goldman Sachs is now recommending gold for just this reason, telling clients gold "is the currency of last resort, acting as a hedge against currency debasement." The investment giant expects the metal to trade well above $1,800 in the next 12 months, according to MarketWatch.

The other precious metals were also sharply higher. Silver rose another 7.5%, extending yesterday's 7.1% jump. Platinum and palladium climbed 11.8% and 14.8%, respectively, after major supplier South Africa locked down because of the coronavirus.

At the Comex close: April gained $93.20 to $1,660.80; May silver rose $1 $14.26; April platinum climbed $74.20 to $701.70; and June palladium soared $230 to $1,786.90 an ounce.

  

Metal Ask      Change
Gold $1,663.12           $-10.39
Silver $15.45           $0.20
Platinum $750.50           $-1.12
Palladium $2,250.55           $36.95
In US Dollars