Gold futures declined on Thursday, finding haven-related interest in short supply as investors eye moves in the dollar and in global equities, setting prices up for a loss on the week.
The metal pared some of its earlier declines after a report on weekly jobless claims showed that the number of Americans seeking unemployment benefits in the latest week held nearly steady at 1.5 million, while the number of workers unemployed remains elevated, despite the U.S. economy showing signs of recovery from the COVID-19 pandemic.
The level of new weekly jobless claims fell below 2 million in recent weeks from a peak of 6.9 million in late March, according to the Labor Department. The recent level still is well above the highest week on record before this year of 695,000 in 1982, The Wall Street Journal reported.
U.S. benchmark stock indexes were trading mixed following the data. Risk appetite may be waning, as the number of new coronavirus cases rises in at least nine U.S. states, prompting concerns about possibly re-implementing lockdowns to limit the spread.
Against that backdrop, August gold GCQ20, -0.35% fell $5.20, or 0.3%, to trade at $1,730.40 an ounce, on Comex. Gold futures have been trading in a $1,670 to $1,770 range for about two months despite a sharp fall in that time for the U.S. dollar DXY, +0.11% against major currencies. Week to date, prices were down about 0.4%, according to FactSet data.
Expect next week to see a “return to basics,” to general worries investors face, said George Gero, managing director at RBC Wealth Management, in emailed commentary. Those include China-U.S. tariffs, digital tax worries in the Eurozone, concerns surrounding India-China and North Korea, elections worries in U.S., political headlines and economic headlines, he said.
“All this may add buyers next week to gold—on [the] way to $1,800,” said Gero.
Precious metals have benefited from monetary efforts by central banks to contain the damage wrought by the viral outbreak that has infected about 8 million people globally. The Bank of England on Thursday said it was expanding its asset purchases to stimulate its economy by £100 billion, or $125 billion, to £745 billion.
“Technically, the gold bulls have the firm overall near-term technical advantage amid choppy and sideways trading at higher levels,” wrote Jim Wyckoff, senior analyst at Kitco.com, in a Thursday research note.
“Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,761.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00,” he wrote.
In other Comex metals action, July silver SIN20, -1.35% edged 22.5 cents, or 1.3%, lower $17.55 an ounce.
July copper HGN20, +0.19% added 0.2% to $2.5955 an ounce. July platinum PLN20, -3.07% shed 2.7% to $815.50 an ounce and September palladium PAU20, -0.05% traded at $1,918.70 an ounce, down nearly 0.4%.
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