By Bryan Wong
Investing.com - Gold was down on Friday morning in Asia over emerging signs of a U.S. economic recovery. An earlier recovery in the price on the greenback also put pressure on gold, but the suspension of talks for COVID-19 stimulus measures in the U.S. capped gold's losses.
Gold futures dropped 0.71% to $1,956.40 by 11:11 PM ET (4:11 AM GMT).
“Risk sentiment is slowing down. It’s too early to say the whole (dollar) downtrend is over...but it’s got potential,” Westpac FX analyst Imre Speizer told Reuters.
There are also signs that economic recovery is underway, which also hit at demand for gold.
The U.S. on Thursday reported 963,000 initial jobless claims for the past week, lower than the 1.1 million in forecasts prepared by Investing.com.
However, the deadlock in the negotiations for a COVID-19 stimulus package in the U.S. curbed investor risk appetite and capped losses for gold. After wrapping up its session on Thursday, the Senate will not return this month unless negotiators strike an agreement.
An impasse over the next round of negotiations also looks likely, as Democrats and Republicans said they are “hopelessly far apart on a deal”. The lack of progress could help push gold back up to the $2,000 mark.