Gold gains as weak US jobs data, virus worries dim recovery hopes
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[BENGALURU] Gold prices rose on Thursday as grim US jobs data and worries over surging Covid-19 cases worldwide cast doubts over a quick economic recovery and bolstered the metal's safe-haven appeal.
Spot gold rose 0.3 per cent to US$1,811.31 per ounce by 3.24am GMT. US gold futures were up 0.2 per cent to US$1,808.70.
US weekly jobless claims rose for the second straight week, data on Wednesday showed, undermining the recovery in the labour market amid rising coronavirus cases and business restrictions.
"The (jobs) data clearly highlighted the divergence between positivity driven by the vaccine and the near-term Covid-19 issue," said Stephen Innes, chief global market strategist at financial services firm Axi, noting that the report also boosted the chances for further stimulus.
"The vaccine narrative has watered down gold's appeal immensely and it will continue too until we finally move from a deflationary world into an inflationary world," Mr Innes added.
The United States recorded 2.3 million new coronavirus infections in the past two weeks, while soaring cases prompted a lockdown extension in Germany.
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US Federal Reserve (Fed) policymakers discussed how the central bank's asset purchases could be adjusted to provide more support to markets, with some Federal Open Market Committee participants expecting the Fed to eventually lengthen the maturity of the bonds purchased.
"With the widespread distribution of a coronavirus vaccine unlikely before H2 2021, central banks are likely to remain accommodative," ANZ analysts said in a note.
The bank kept its 12-month target of US$2,100 per ounce for gold, saying accommodative central bank policy and US dollar weakness meant gold was well supported with a low likelihood of a bear market.
Gold is seen as a hedge against inflation likely to result from large stimulus.
Silver rose 0.5 per cent to US$23.40 an ounce. Platinum gained 0.4 per cent to US$966.86 and palladium was 1.2 per cent higher at US$2,356.77.
REUTERS
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