By Barani Krishnan
Investing.com - Gold prices dipped on Thursday, losing some of their sheen after a marginal drop in U.S. jobless claims suggested further economic recovery that could boost risk assets rather than safe havens.
U.S. gold futures for August delivery settled down $4.50, or 0.3%, at $1,731.10 per ounce on New York’s Comex.
Spot gold, which tracks real-time trades in bullion, slid $3.10, or 0.2%, to $1,723.89.
Some 1.5 million Americans filed for first-time unemployment claims last week, bringing the total number of weekly claims filed since the start from the coronavirus pandemic to nearly 46 million, the Labor Department said. Compared with the previous week, there were 34,000 fewer jobless claims filed last week.
Stocks on Wall Street pounced on the decline in claims, rising in early trade before turning red in late trading. The reversal in risk appetite helped put a floor under the gold market, limiting its losses.
“The general picture remains that the economy is heading in the right direction and the labor market is still very bad,” said Ed Moya, an analyst at New-based online trading platform OANDA.
“Gold is in a tricky place but will ultimately see further support if the labor situation remains weak,” Moya added. “Global equities will also struggle to improve upon recent gains on a debatable V-shaped economic recovery, rising Covid-19 cases, rebalancing of the S&P and Russell indexes, and a wrath of geopolitical risks, stemming from the US-China trade war, tension amongst the Koreas, and even disputes on the Himalayan border.”
Although gold failed this week to break beyond the $1,750 resistance, TD Securities said it was clear that prices remained range-bound near multi-year highs.
“In this context, a continued growth normalization should be welcomed by gold bugs as a reversal in safe-haven flows should be offset by investment demand, with real rates significantly suppressed,” the Canadian brokerage said in a note.