Gold futures finished lower Thursday for the first time in three sessions, after pushing to a nearly two-month high a day earlier, as investors weighed surging COVID-19 cases particularly in Asia.
“After two straight days of gains, the gold bulls are pausing for breath around $1,790,” said Sophie Griffiths, market analyst at Oanda, in a note.
Gold for June delivery
lost $11.10, or 0.6%, to settle at $1,782 an ounce on Comex.
declined by 39 cents, or 1.5%, at $26.18 an ounce. On Thursday, the Silver Institute’s World Silver Survey 2021, produced by researchers at Metals Focus, forecasted higher global silver demand and prices for this year.
Gold had settled at $1,793.10 on Thursday, its highest level in nearly two months, with gains attributed in part to a fall in U.S. Treasury yields. Falling yields can be a positive for gold, reducing the opportunity cost of holding it and other commodities that don’t offer yields.
Overall, “gold continues stepping higher, setting a higher high and higher lows in each of the three weeks since it re-tested March’s nine-month low at $1,680,” said Adrian Ash, director of research at BullionVault. “Consumer demand in the giant markets of China and India is offering strong support, and Western ETF outflows have slowed to a trickle.” Gold futures trade nearly 4% higher month to date.
Meanwhile, surging COVID-19 cases India and Japan in particular “have revived fears over the global economic recovery,” said Griffiths.
India reported a global record of more than 314,000 new infections Thursday.
“These concerns have not only dragged U.S. interest rate expectations lower, boosting demand for nonyielding gold, but have also lifted demand for safe-haven assets,” Griffiths said.
Gold prices briefly pared losses in the immediate aftermath of the weekly U.S. jobless claims data Thursday, then headed toward session lows. Jobless benefit claims fell to 574,000 last week from a revised 586,000 a week earlier, the U.S. Labor Department said.
“The U.S. weekly jobless claims data was much stronger than market expectations and this has stopped the gold price from soaring further,” said Naeem Aslam, chief market analyst at AvaTrade.
Also, “if we look at the gold price on the daily time frame, the 100-day [simple moving average level] is also turning out to be a strong resistance,” he told MarketWatch. “The gold price needs to clear this resistance in order for the price to continue to move higher.” The 100-day moving average is at $1,806.51, according to FactSet data.
Also on Thursday, the Conference Board said the index of U.S. leading economic indicators rose 1.3% in March. Existing home-sales fell 3.7% to a seasonally-adjusted, annual rate of 6.01 million last month, the National Association of Realtors reported, but median home prices rose by 17%.
Meanwhile, the European Central Bank, as expected, left interest rates unchanged and made no changes to its bond-buying efforts on Thursday.
While the ECB seems to have “disappointed the bond market” Thursday by failing to expand its massive quantitative easing, “its policy statement made a point of stressing just how dramatic that QE has already become,” said BullionVault’s Ash.
On top of the Federal Reserve, Bank of Japan and U.K. Bank of England’s commitments, “the sheer scale of ongoing stimulus means the long-term case for investing in gold remains solid,” he said.
Among other metals traded on Comex, May copper
settled at $4.27 a pound, down 0.1%, after climbing 1.6% on Wednesday.