By Barani Krishnan
Investing.com – Gold crept towards mid-$1,700 on Thursday as a relative decline in U.S. job losses from the coronavirus pandemic signaled to investors that Wall Street’s slow and steady rally may stay the course.
And what’s good for Wall Street these days is good for the yellow metal, which would likely be hit by liquidation pressure should equities tumble, as gold’s unique position as a store of value enabled people to redeem it anytime to cover losses anywhere.
Gold futures for June delivery on New York’s COMEX settled up $7.10, or 0.4%, at $1,745.40 per ounce. The contract has gained nearly $60, or 3%, over the two past sessions in a move that gold bulls hope would lead to a test of the $1,800 resistance.
Spot gold, which tracks live trades in bullion, was up $14.65, or 0.9%, at $1,728.32 by 3:10 PM ET (19:10 GMT).
More than 4.4 million Americans filed for first-time unemployment claims last week as Covid-19’s toll on the economy continued, the Labor Department said in its weekly jobless claims report.
But while total job losses over a five-week period hit 26 million — wiping out all employment gains since the 2008/09 financial crisis — last week’s filings were still lower than the previous week’s 5.25 million.
Investors seemed to take heart in that, amid the trillions of dollars spent by governments across the world in stimulus to fight the pandemic.
“U.S. stocks and the dollar had a muted reaction to the latest jobless claims report because the trajectory seems to be improving, (though) massive job losses are still expected over the coming weeks as more people become furloughed and as backlogs clear,” said Ed Moya, analyst at New York-based online trading platform OANDA.
“Gold’s climb towards $1,800 continues. The stimulus trade is not going away anytime soon and that should mean record highs for gold (in dollar terms) by the summer,” Moya added.
Gold Tiptoes Toward $1,750 as Latest U.S. Job Losses Ease Liquidation Heat
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