Gold rises early Friday as dollar slumps amid weak U.S. jobs numbers and hopes for more stimulus from central banks to mitigate the economic effects of the coronavirus pandemic. This will be the second straight weekly gain for the yellow metal.
Gold rebounded after the Federal Reserve indicated Wednesday that it would keep interest rates near zero for some time and the Bank of England said Thursday it was considering negative interest rates to mitigate higher unemployment, the COVID-19 pandemic and a possible Brexit shock. Also Thursday, the Bank of Japan signaled it would be willing to boost stimulus measures. Central bank stimulus is typically bullish for gold.
Gold futures fell 1.1% Thursday to settle at $1,949.90 an ounce on Comex. The December contract increased $2 in the first four days of the week. Gold is still up more than $400 — or 28% — so far this year as investors have flocked to gold because of uncertainty from the coronavirus pandemic and the economy. Currently, the December contract is up $7.80 an ounce to $1957.70, while the DG spot price is $1,950.60.
Trading is likely to be volatile Friday because it’s what’s known as quadruple witching in U.S. markets — when the quarterly expiration of futures and options on indexes and stocks coincides.
The Bank of England said that the economic outlook remains “unusually uncertain” and is openly considering how to use negative interest rates. Meanwhile, Bank of Japan Governor Haruhiko Kuroda pledged Thursday to support the economy through the recession by maintaining central bank stimulus. The comments came a day after Fed Chairman Jerome Powell said the U.S. faces a long road back to maximum employment.
Another 860,000 Americans filed new claims for unemployment benefits last week, an increase from the prior week and a signal that a potential U.S. economic recovery may be losing momentum. Continuing claims were at 12.628 million, according to the data from the Labor Department.
The virus known as COVID-19 has killed almost 945,000 people worldwide, sickened 30.1 million and decimated global economic growth. About 22% of the cases — and 21% of the deaths — are in the U.S. The country has 6.67 million cases, more than any other nation. The economic impact of the coronavirus pandemic and associated lockdowns has cost millions of Americans their jobs.
Silver futures fell 1.4% Thursday to settle at $27.10 an ounce on Comex, and the December contract increased 0.9% in the first four days of the week. The most active contract is down 5.2% this month after gaining 18% in August and soaring 30% in July. The December contract is currently slightly down to $27.000 an ounce, while the DG spot price is $26.84.
Spot palladium decreased 3.4% Thursday to $2,333.90 an ounce and is down 70 cents so far this week. Spot platinum declined 3.8% Thursday to $935.90 an ounce and has rallied 30 cents over the past four days. Currently, the DG spot price for platinum is $940.80 an ounce, while palladium is $2,339.70.
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