Gold jumped over 1% on Thursday, rebounding from a near three-week low hit in the last session, as the dollar dipped and a slow recovery in the US labor market reinforced the economic toll from the coronavirus pandemic.
Spot gold rose 1.5% to $1,947.08 per ounce by 10:58 am EDT (1458 GMT), having slipped below $1,900 on Wednesday. US gold futures rose 0.2% to $1,952.10.
US jobless claims dropped below one million last week for the first time since the start of the pandemic, though at least 28 million people are still receiving unemployment checks, indicating a weak labor market.
“The dollar has been quite weak … this recovery we’ve had (in the labor market) has been the low-hanging fruit. It’s an easy bounce,” said Edward Meir, analyst at ED&F Man Capital Markets.
“The initial claims are still running at a very high rate, and there is still a long way to go,” Meir said.
The dollar was down 0.4% against rivals, bolstering gold’s appeal for those holding other currencies, as Washington continues to remain in a stalemate over additional stimulus.
Adding to the gloomy outlook, Federal Reserve policymakers warned U.S. growth would be muted until the coronavirus was contained.
Investors are now eyeing a meeting between the United States and China on Aug. 15.
“The underlying factors in the market have not changed significantly. The fact that gold did not move still higher when Sino-U.S. tensions escalated over the weekend signalled that most of the tailwinds were priced in,” said StoneX analyst Rhona O’Connell in a note.
“Investor sentiment remains robust overall.”
Elsewhere, silver rose 4.6% to $26.73 per ounce, platinum gained 2.6% to $955.50 and palladium climbed 1.9% to $2,172.68.
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