Gold regained momentum on Wednesday following a sharp slide toward the $1,800 pivot in the previous sessions, as an unexpected rise in US jobless claims tempered some of the COVID-19 vaccine-led optimism on Wall Street.
Spot gold rose 0.3% to $1,812.66 an ounce at 10:15 a.m. EST (1515 GMT), having hit its lowest since July 17 at $1,800.01 on Tuesday. U.S. gold futures were up 0.4% at $1,811.00.
Wall Street opened flat on signs of the slowdown in the labour market recovery, in contrast to the record runs seen in global equities as encouraging developments on Covid-19 vaccines and a smooth White House transition bolstered bets on a swifter economic rebound.
The jobless data is supportive for gold “just on notions that we’ve still got a very dark period ahead before we get through this pandemic,” Kitco Metals senior analyst Jim Wyckoff said.
A subdued dollar also spurred gold by making it cheaper for those holding other currencies.
The dollar’s slide “along with the technical support (for gold near $1,800), convinced some people to maybe stop selling and acquire some more positions,” said Bart Melek, head of commodity strategies at TD Securities.
{{/usCountry}}The dollar’s slide “along with the technical support (for gold near $1,800), convinced some people to maybe stop selling and acquire some more positions,” said Bart Melek, head of commodity strategies at TD Securities.
{{/usCountry}}“The next six months are going to be very difficult; we’re going to experience significantly below potential growth, and governments and central banks will have to significantly add to stimulus to make sure we don’t get the second wave transform into a long period of economic underperformance,” Melek added.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion, which has risen over 19% this year benefiting from its status as a hedge against inflation and currency debasement.
Elsewhere, silver was up 0.6% at $23.39 an ounce, platinum rose 0.1% to $962.46 and palladium was down 0.5% at $2,336.69.