Gold traders have seen prices ease from the highest point in nearly two weeks as investors grew hopeful about economies reopening after COVID-19 lockdowns.
Spot gold fell 0.8 per cent to $US1,704.53 per ounce by 1831 GMT after hitting $US1,722.56, its highest price since April 27. Prices were up 0.3 per cent for the week.
US gold futures settled 0.7 per cent lower at $US1,713.90.
Also limiting gold’s appeal was slightly better-than-expected data from the United States that showed job losses in April hit 20.5 million, fewer than the expected 22 million. The unemployment rate was 14.7 per cent, lower than the market forecast of 16 per cent.
Still, overall the US economy suffered its steepest monthly plunge in payrolls since the Great Depression, the starkest sign yet of how the novel coronavirus pandemic is battering the world’s biggest economy.
“Even though the jobs number was clearly dramatic – the worst number we ever had as a nation – on the back of that we see slight bit of optimism moving forward with the economy reopening slowly here in the US,” said David Meger, director of metals trading at High Ridge Futures.
The April nonfarm payrolls data lifted US stock markets, adding to optimism from an easing in tensions between Washington and Beijing.
Wall Street’s indexes are on course for their first weekly increase in three, as investors pinned their hopes on supply chains coming back on track and a revival in consumer spending after several US states reopened economies.
However, “the primary drivers for strength in gold – interest rates at zero, massive spending and deep concerns about a second wave of infection – remain powerful so gold’s prospects remain strong over the medium term,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
The latest batch of week US economic data fueled expectations of more stimulus from the Federal Reserve, with markets pricing in a negative interest rate environment.
Lower US interest rates pressure the dollar and bond yields, increasing the appeal of non-yielding bullion.
Sino-US friction appeared to ease after Beijing said trade negotiators from both countries had agreed to improve the atmosphere for implementing a Phase 1 deal, days after US President Donald Trump threatened new tariffs.
Palladium rose 0.7 per cent to $US1,869.25 per ounce and platinum gained 0.5 per cent to $US767.48.
Silver dipped 0.3 per cent to $US15.45.