Gold holds its ground as U.S. equities sell-off sharply attributed to growing pandemic

Gold prices remained steady and held their ground in light of sharp declines in equities in the United States. If it was not for dollar strength spot and futures gold pricing would have closed modestly higher on the day.

As of 4:25 PM EST spot gold is currently fixed at $1902.30 which is a net gain of $1.00. According to the KGX (Kitco Gold Index), today’s net gain was muted by dollar strength which accounted for a decline of $6.65. Buyers bid spot pricing higher by $7.65 to result in a fractional net gain on the day.

Gold futures are currently fixed at $1903.80 which is a net decline of $1.40, (-0.08%). However, just as in spot gold pricing it was U.S. dollar strength that attributed the greatest move in gold futures today. Currently, the dollar index is up approximately 30 points or +0.33%. This means that there was modest or fractional buying in gold futures however they were unable to overcome dollar strength.

Unlike recent selloffs in U.S. equities that were largely attributed to the uncertainty about the upcoming presidential election which is just under one week away, today market participants reacted nervously as the coronavirus pandemic indicates a large spike in new infections.

Fears of a growing pandemic as the number of COVID-19 cases surge sharply higher led to a sharp decline in U.S. equities across the board. U.S equities had their worst day since September 23. All three major indexes close substantially lower with the Dow Jones industrial average losing 2.29% (-650.19 points). The S&P 500 lost 1.86% (- 64.62 points), and the NASDAQ composite lost 1.64% (- 189.35) in trading today.

Surges in the virus seemed to be worse in pockets of the United States with Texas and California now tied for the largest number of infections. According to NBC News, “Texas was neck and neck with California as the state with the most confirmed coronavirus cases since the start of the pandemic, the latest NBC News figures showed Monday. The Lone Star State had reported 910,124 cases since the start of the pandemic while California, which had led the nation in this woeful category for months, had 909,161, according to the tally.”

The United States is not alone as many countries are experiencing record numbers. This has led to countries in Europe imposing new restrictions in attempts to lessen the number of new COVID-19 cases.

According to NPR, “New regulations and social distancing rules are being introduced across multiple European countries in an attempt to stop the spread of the coronavirus as a second wave of the pandemic accelerates across the continent. Europe reported more than 1.3 million new cases this past week, its highest single week count yet, according to the World Health Organization.”

Concerns about the pandemic deepening have led to strength in the safe-haven assets. Gold and the U.S. dollar have once again become the standards for the safe-haven asset group.

Wishing you as always, good trading and good health,