Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold mostly held steady, inching down 70 cents to hold above $1,813, as risk appetite from rising equities was largely offset by pandemic worries, a weaker dollar, and tensions between the US and China.

Wall Street rallied behind better-than-expected earnings from several blue-chip banks, lifting the Dow higher by 1.5% and the S&P 500 by 0.6%. Most of the revenue has come from trading divisions, which have reaped windfalls from gravity-defying stock market gains.

At the same time, however, three of the largest US banks signaled that the good times are unlikely to last. JPMorgan, Citigroup, and Wells Fargo have set aside $28 billion for projected losses on loans and credit card debt as the recession plays out. Citigroup expects GDP to fall 35% before recovery begins; JPMorgan forecasts double-digit unemployment at least through the first half of 2021, according to Reuters.

Federal Reserve Governor Lael Brainard said today that the Fed will have to take more steps to rekindle the economy and suggested keeping interest rates near zero until inflation exceeds 2%. Negative real interest–that is, rates adjusted for inflation–are bullish for gold because they reduce the opportunity cost for holding the metal instead of bonds.

Global cases of coronavirus rose above 13 million this week, with the death rate exceeding 573,000, nearly a quarter of which are in the US. Forty-one states report increasing cases over the last two weeks, and California has reinstated closures of many business to stem spread on infections.

The dollar fell 0.3% against major rivals led by the euro, which rose on prospects for a comprehensive plan to fund economic recovery in the eurozone. A falling dollar supports gold and other commodities priced in it for global trade by making them cheaper in other currencies.

Consumer inflation rose for the first time in four months, with higher gasoline and food costs driving the CPI up 0.6%.

Also lending safe-haven support, tensions are rising between Washington and Beijing over the South China Sea, where the US is resisting China's claims to sovereignty. Relations were already stressed over civil liberties in Hong Kong, access to US financial markets, and accusations that China mishandled the coronavirus.

The other precious metals were lower, with silver dropping 1.3% while platinum and palladium lost 3% and 2.7%, respectively.

At the Comex close: August gold dipped 70 cents to $1,813.40; September silver dropped 26 cents to $19.53; October platinum fell $26.20 to $836.80; and September palladium lost $55.30 to $1,985.60 an ounce.