Gold Slipped After Dollar Strengthened

Gold Slipped After Dollar Strengthened

Gold slipped after the dollar strengthened early Friday against a basket of currencies and European and Asian shares advanced amid investor confidence that a new coronavirus doesn’t yet constitute a global emergency that could disrupt the world’s economy.

The Dollar Index traded near a one-month high in the previous session after the European Central Bank on Thursday kept interest rates steady and is likely to leave negative rates in place for some time. A stronger dollar is typically bearish for gold, which is seen as an alternate investment. Federal Reserve policy makers will meet for the first time in 2020 next week but aren’t expected to change rates.

The World Health Organization said that the coronavirus that began in the Chinese city of Wuhan isn’t yet an international public health concern — just a Chinese one. Major Chinese cities including Beijing and Wuhan — which is under quarantine — banned all large gatherings over the Lunar New Year festival. The holiday Saturday is the most important one on the Chinese calendar and many financial markets in Asia were closed Friday for the long weekend. At least 26 deaths from the virus have been confirmed in China and hundreds of people are infected.

April gold futures rose 0.6% Thursday to settle at $1,571.60 an ounce on Comex. The front-month contract, which rolled this week from February, was up 0.7% in the week through Thursday. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.2% Thursday to 900.58 metric tons.

Economic news Thursday was mostly positive. U.S. initial jobless claims remain near a 50-year low, though they rose slightly last week — by 6,000 to 211,000 — in Labor Department data. The economy continues to grow at a roughly the 2% pace that has held since the last recession, though it did slow in December. The Conference Board’s leading economic index fell 0.3% last month in the fourth decline in five months, data showed Thursday.

Silver added 0.1 cent Thursday to settle at $17.83 an ounce on Comex. The March futures contract decreased 1.4% in the first four days of this week.

Spot palladium, a metal used primarily in autocatalysts, decreased 0.5% Thursday and is down 1.4% this week after surging 18% last week amid a global supply crunch. Spot platinum dropped 1% Thursday and is down 1.7% so far this week.

 

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