Gold gains on higher US jobless claims, economic recovery fears
[BENGALURU] Gold recovered on Thursday from a side of more than 3 per cent in the last session, after US jobless claims unexpectedly topped one million again and the US Federal Reserve minutes reiterated concerns over economic recovery.
Spot gold rose 0.6 per cent to US$1,940.14 per ounce by 1.42pm EDT (1742 GMT). US gold futures settled down 1.2 per cent to US$1,946.50.
"The Fed minutes reiterated the need for people to own gold, they were still concerned about the coronavirus and its impact on the economy - that shows they want to stay accommodative and help consumers stay afloat," said Michael Matousek, head trader at US Global Investors.
Minutes from the US central bank's last policy meeting showed policymakers were concerned the economy faced a highly uncertain path and more monetary support may be needed, although they downplayed the need for yield caps and targets.
An unexpected rise in US jobless claims to back above one million last week was also helping gold, analysts said.
The US economy has regained only 9.3 million of the 22 million jobs lost between February and April.
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The US dollar index eased from a near one-week high, making the non-yielding metal cheaper for holders of other currencies.
"The main fundamentals behind gold have not changed," said Edward Meir, an analyst at ED&F Man Capital Markets. "Stimulus is still coming in and it's very premature to say we're recovering globally and should see higher rates and stronger dollar; we are many months away from that."
Central banks have rolled out massive stimulus and cut interest rates to near zero to combat the economic toll from the coronavirus pandemic, prompting 28 per cent gains for the year in gold, considered a hedge against inflation and currency debasement.
Elsewhere, silver gained 1.3 per cent to US$27.07 per ounce, platinum dipped 2.2 per cent to US$911.22 an ounce, and palladium rose 0.7 per cent to US$2,172.54 an ounce.
REUTERS
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