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April 1, 2020, 2:13 p.m. EDT

Gold down 4th straight session as traders cast a wary eye on economic data amid coronavirus spread

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By Myra P. Saefong and Mark DeCambre, MarketWatch


AFP/Getty Images

Gold futures on Wednesday started the month with a loss, stretching their decline to a fourth straight session, as traders cast a wary eye on the latest U.S. economic data amid the spread of the COVID-19 pandemic, which has helped to partly support gold buying or at least limited downside for the precious metal.

Equity markets are “down on dire modeling predictions” from U.S. officials Monday on the number of potential deaths in the nation from the coronavirus pandemic, said Jeff Wright, executive vice president of GoldMining Inc.

U.S. economic data Wednesday came in better than expected, but analysts said they don’t include much of the impact from the COVID-19 pandemic.

Earlier Wednesday, a report on private-sector employment from Automatic Data Processing Inc. /zigman2/quotes/207661132/composite ADP +1.16% helped give gold prices a modest push higher. The report found that 27,000 jobs were lost in the month, smaller than forecasts from economists surveyed by Econoday who expected a decline of 180,000, but likely a harbinger of what is to come after jobless claims last week produced a record 3.28 million claims for the period.

Separately, the ISM manufacturing index fell to 49.1% in March from 50.1%. Economists surveyed by MarketWatch had forecast the index to drop to 44%.

“Common sense” says there were more than 27,000 jobs lost in March, “so data is lagging badly,” Wright told MarketWatch.

For now, he sees gold hovering around $1,600 and still in $1,550-1,650 trading range near term, but added that panic selling of gold could be over as fundamentals come back to being relevant.

June gold /zigman2/quotes/210036801/delayed GCM20 -0.35%  on Comex fell $5.20, or 0.3%, to settle at $1,591.40 an ounce. That marked a fourth decline in a row for the contract. Based on the most-active contracts, gold futures rose 1.9% in March and gained 4.8% for the quarter, according to Dow Jones Market Data.

Moves for gold came as global stocks were under renewed pressure amid growing concerns about the economic implications for the epidemic which are hard to fathom for investors. On Tuesday, President Donald Trump warned that a “very, very painful” two weeks lies ahead as the COVID-19 pandemic continues. The White House released new projections for 100,000 to 240,000 deaths in the U.S. from the coronavirus pandemic even if current social-distancing guidelines are maintained.

Meanwhile, the number of COVID-19 cases world-wide have risen to 862,234 on Wednesday, while the number of deaths have climbed to 42,404, according to data from Johns Hopkins University.

“Gold prices should rise as the virus spread is intensifying alongside lockdown efforts to mitigate it,” wrote Edward Moya, senior market analyst at Oanda, in a Wednesday research note. He said that gains for bullion are likely supported by fears the measures being implemented to prevent the spread of the deadly infection will result in a global recession, a boon for gold buyers.

May silver /zigman2/quotes/210316811/delayed SIK20 +0.15% , meanwhile, settled 17.2 cents, or 1.2%, lower at $13.984 an ounce to start the new month and quarter. Based on the most-active contracts, silver lost about 14% for the month and saw a quarterly decline of 21%.

Wright said he’s still “avoiding silver right now due to global recession and lack of demand [through] 2020.”

Among other metals, May copper /zigman2/quotes/210056480/delayed HGK20 -0.27%  shed 2.4% to $2.1745 a pound. July /zigman2/quotes/211798678/delayed PLN20 -0.70%  lost 1.7% to $717.80 an ounce and June palladium /zigman2/quotes/210240810/delayed PAM20 +0.32%  lost 7.1% to $2,140.80 an ounce.

/zigman2/quotes/207661132/composite
US : U.S.: Nasdaq
$ 134.87
+1.55 +1.16%
Volume: 2.20M
May 22, 2020 4:00p
P/E Ratio
23.12
Dividend Yield
2.70%
Market Cap
$57.96 billion
Rev. per Employee
$242,819
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/zigman2/quotes/210036801/delayed
US : U.S.: Nymex
$ 1,729.40
-6.10 -0.35%
Volume: 8,765
May 24, 2020 11:00p
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/zigman2/quotes/210316811/delayed
US : U.S.: Nymex
$ 17.69
+0.03 +0.15%
Volume: 52.00
May 22, 2020 4:45p
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/zigman2/quotes/210056480/delayed
US : U.S.: Nymex
$ 2.40
-0.0065 -0.27%
Volume: 2.00
May 24, 2020 11:00p
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/zigman2/quotes/211798678/delayed
US : U.S.: Nymex
$ 880.10
-6.20 -0.70%
Volume: 448.00
May 24, 2020 11:00p
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/zigman2/quotes/210240810/delayed
US : U.S.: Nymex
$ 1,983.50
+6.40 +0.32%
Volume: 88.00
May 24, 2020 10:27p
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Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong. Mark DeCambre is MarketWatch's markets editor. He is based in New York. Follow him on Twitter @mdecambre.

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