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Gold Firms On Economic Worries, Stimulus Hopes

Gold Firms On Economic Worries, Stimulus Hopes

Gold prices rose on Friday as gloomy U.S. jobs data cast a shadow over the economic outlook, and major central banks pledged to roll out further stimulus if required to revive their coronavirusbattered economies.

Gold prices rose on Friday as gloomy U.S. jobs data cast a shadow over the economic outlook, and major central banks pledged to roll out further stimulus if required to revive their coronavirus-battered economies.

Spot gold climbed 0.5% to $1,951.32 per ounce by 0348 GMT, having fallen to a one-week low in the previous session. It has gained 0.5% so far this week.

U.S. gold futures were 0.5% higher at $1,959.

“Virus concerns are still weighing down on economic recovery and when you look at a lot of economic data it looks like it’s moderating but there is still tremendous damage,” said Edward Moya, a senior market analyst at broker OANDA. “There’s still going to be need for more support.”

The weekly jobless claims report from the U.S. Labor Department showed nearly 30 million people were on unemployment benefits at the end of August, laying bare the continuing economic and human devastation from the COVID-19 pandemic.

The Federal Reserve on Wednesday vowed to keep interest rates near zero for a long time, noting that the pandemic “will continue to weigh on economic activity” in the near term.

On Thursday, the Bank of England said it was considering negative interest rates amid rising COVID-19 cases, higher unemployment and a possible new Brexit shock, while the Bank of Japan signalled readiness to ramp up stimulus.

“Underlying factors remain supportive for gold, as we expect the U.S. dollar to weaken while bond yields will remain low as central banks keep monetary policies accommodative,” Fitch Solutions said in a note.

Near-zero interest rates globally and demand for a hedge against perceived inflation have helped gold gain nearly 29% so far this year.

The dollar index steadied after falling overnight.

Among other precious metals, silver eased 0.2% to $27.03 per ounce. Platinum inched 0.1% lower to $939.79 per ounce, while palladium was steady at $2,336.12.

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