Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 2% to close at a two-month low under $1,869 as another Wall Street selloff and a rebounding dollar pushed investors into cash, undercutting demand for alternative stores of value.

Soft economic data and surging COVID-19 cases in the US and Europe hammered Wall Street for the second time in three sessions, driving the Dow down by 1.8% while the tech-heavy Nasdaq tumbled 2.2%. The S&P 500 fell 2.1% to brush against a technical correction, defined as a 10% drop from a recent peak.

Echoing Monday's plunge, the selloff was driven slowing economies and rising infections in the US and Europe. Traders were again forced to cash out liquid assets like gold and silver to cover losses.

Business growth has faltered in September in the Eurozone and UK while new restrictions are being implemented to prevent another surge in the pandemic. In the US, new cases doubled yesterday, and 21 states reported uptrends over the past week, led by Texas, Wisconsin, Oklahoma, and New York.

IHS Markit's flash PMI for the broad US service sector fell in September, signaling a further loss of economic momentum as the nation moves into the colder months, when the beginning of flu season is expected to compound the impact of the coronavirus.

The dollar extended its rally to a new two-month high, adding another 0.3% against major rivals, especially the euro and pound, as Forex trades shifted again toward the perceived safety of the US currency. A stronger dollar pressures gold and other commodities priced in it for global trade by making them more expensive outside the US.

In a bullish development for gold in the longer term, several key Fed officials emphasized today that interest rates will stay near zero for years and inflation is likely to allowed to run much hotter than before.

Fed Vice Chairman Richard Clarida said the central bank won’t even think about raising rates until the core PCE, the Fed's preferred inflation measure, exceeds 2%. It was 1.3% in August. Chicago Fed President Charles Evans said inflation at 2.5% for some time "is likely in the cards." And both Fed Chair Jerome Powell and Vice Chair Randal Quarles said this week that deeper stimulus will be needed to sustain recovery.

Gold thrives in periods of high inflation, low interest rates, extreme monetary stimulus as a hedge against loss of purchasing power and currency debasement.

The other precious metals were mostly lower, with silver and platinum losing 5.8% and 1.7%, respectively, while palladium added 1.3%.

At the Comex close: December gold lost $39.20 to $1,868.40; December silver dropped $1.42 to $23.11; October platinum slid $14.40 to $843; and December palladium rose $28.70 to $2,258.30 an ounce.