By Barani Krishnan
Another week of whopping U.S. job losses should ideally have Gold prices racing upward. But the safe-haven crowd behind the yellow metal remained restrained Thursday on expectations President Donald Trump was ready to announce guidelines on reopening the U.S. economy from lockdowns imposed over the Covid-19 pandemic.
“The president is eager to rush open some parts of the economy as the coronavirus is plateauing in some parts of the country,” said Ed Moya, analyst at online trading platform OANDA. “While the country is nowhere near ready in delivering coronavirus testing to the masses, a return to work for some will be critical in slowing down the current economic freefall of pain.”
Gold futures for June delivery on New York’s COMEX settled down $8.50, or 0.5%, at $1,731.70 per ounce. Just on Tuesday, June gold hit a seven-year high of $1,788.75, capping a gain of $165, or 10%, from a rally from end-March that had seen few stops.
Spot gold, which tracks live trades in bullion, was up 9 cents, or 0.01%, at $1,715.50 by 2:36 PM ET (18:36 GMT).
Some 5.25 million more Americans filed first-time claims for unemployment insurance last week, the Labor Department reported Thursday. That brought job losses directly caused by Covid-19 to just over 22 million in four weeks, nearly wiping out all the employment gains since the end of the financial crisis.
“The jobs data was bad, but investors have grown to expect that and used it as an excuse to lock in profits,” Moya said.
Most analysts expect gold to regain its upward trajectory though and aim for a crack at the $1,800 wall.
“Less gold mining activity, upcoming inflation from massive government stimulus for the Covid-19, weak agriculture prices, floods, transportation and China returning with big gold buy programs will combine to move the market toward $1,800,” said George Gero, precious metals analyst at RBC Wealth Management in New York.
