Gold futures fell Thursday as the U.S. dollar rose in the wake of new lockdowns in Europe to combat rising coronavirus cases, while equities worldwide slipped on fears of slowing economic growth.
The dollar has strengthened with the euro EURUSD, -0.37% and British pound GBPUSD, -0.65% both falling against the greenback as Europe focuses on Brexit talks and the coronavirus spread and lockdown, said Chintan Karnani, chief market analyst at Insignia Consultants, in a market update. A stronger greenback can make dollar-priced gold more expensive to overseas buyers.
In Thursday dealings, the ICE U.S. Dollar Index DXY traded up around 0.5%.
December gold GOLD, -2.11% GCZ20, -0.51% rose fell $9.40, or 0.5%, to trade $1,897.90 an ounce after a 0.7% gain on Wednesday, highlighting fitful trade for bullion on the week.
Silver for December delivery SI00, -1.66% SIZ20, -1.66%, meanwhile, shed 38.5 cents, or 1.6%, to $24.01, following a 1.1% gain in the previous session.
On the week so far, gold prices have lost 1.3%, while silver futures are down 4.1%, according to FactSet data.
Gold has moved in line with the dollar’s strength absent other catalysts of late but some longer-term investors believe that a resurgence of the pandemic and the belief that the viral outbreak may lead to further global fiscal stimulus has been considered a boon for bullion.
“Ultimately, gold will benefit as Europe unleashes more stimulus and as investors grow comfortable with a slight pause in aid from Washington DC,” wrote Edward Moya, senior market analyst at Oanda, in a note.
France announced a new curfew in Paris and other major cities, as U.K. also introduced restrictions in London. Meanwhile, European leaders are meeting to discuss the coronavirus pandemic as well as trade talks with the U.K. with the Brexit transition period expiring at the end of 2020.
Gold prices had initially moved higher after data Thursday revealed that the number of Americans who applied for jobless benefits in the week ended Oct. 10 rose by 53,000 to 898,000–the highest level in seven weeks.
“The significant increase in the unemployment claims is another warning sign for the U.S. lawmakers to get their act together,” said Naeem Aslam, chief market analyst at AvaTrade. “The sad fact is that this situation is only going to get worse if we do not get any help in terms of another stimulus package.”
“Traders have become a lot risk averse on the back of this data point,” and that led to move up in gold prices immediately after the jobless claims data, he said in a market update.
Among other metals traded on Comex, December copper HGZ20, +0.29% edged up by 0.3% to $3.0605 a pound. January platinum PLF21, -1.05% fell 1% to $854.50 an ounce and December palladium PAZ20, -0.91% lost 0.8% to $2,348.30 an ounce.
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