Gold futures fell Thursday to their lowest finish in more than a week, with dollar-denominated prices for the metal pressured as the U.S. dollar looked to recoup its loss from a day earlier.
Investors also assessed the landscape for the global economy and markets amid rising U.S. coronavirus cases, while the European Central Bank, as expected kept keep both its key rate and asset-buying program unchanged.
Bullion has been held in a range around $1,800 as rising cases of COVID-19 in many American states undermine the economic recovery, while U.S.- China tensions are also rising.
“The surge in COVID-19 cases in the U.S. has made the situation a little more arduous because businesses are likely to lay off more workers,” said Naeem Aslam, chief market analyst at AvaTrade in a market update.
Weekly U.S. jobless claims data released Thursday showed a decline of 10,000 to a post-pandemic low of 1.3 million, though the small decline points to ongoing stress in the labor market. Retail sales climbed 7.5% last month after a record 18.2% rise in May.
Aslam referred to the latest batch of economic data as “okay news, not great news.” The “fact is that things have started to stall,” he said.
Gold for August delivery /zigman2/quotes/210034565/delayed GC00 -1.03% on Comex fell $13.50, or 0.7%, to settle at $1,800.30 an ounce, after adding less than 0.1% on Wednesday. The settlement was the lowest for a most-active contract since July 6, according to FactSet data.
September silver /zigman2/quotes/210318628/delayed SIU20 -1.70% , meanwhile, declined by 19 cents, or about 1%, at $19.573 an ounce, following a 1.2% Wednesday surge for gold’s sister metal.
The moves for the precious metals came even as equity markets globally were in retreat. The U.S. dollar, meanwhile, was trading 0.2% higher in Thursday dealings, as gauged by the ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.21% following a similar climb a day earlier.
Early Thursday, the ECB’s decision was seen as giving the central bank some time to assess the impact of its policy moves before embarking on any further stimulative measures to prop up economies stricken by business closures and restrictions to help stem the spread of the pandemic.
“While central bank policy makers will have an easy rest of summer, government leaders from the U.S. and Europe will need to deliver their own fiscal responses,” Edward Moya, senior market analyst, at Oanda in a note.
“Gold’s best friend has been stimulus and there will be no shortage of that soon,” he said.
The ECB left its deposit rate at minus 0.5% and its refinancing rate at 0%, and said it would continue net purchases under its asset purchase program at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year.
Meanwhile, investors looked to developments tied to China to help gauge haven demand for gold.
China vowed to retaliate after President Donald Trump ended Hong Kong’s privileged trading status, in response to its imposition of a sweeping national-security law on the territory. China’s foreign ministry said it would impose sanctions on relevant American entities. The New York Times reported that the White House was considering summarily revoking the visas of Chinese Communist Party members.
Among other metals traded on Comex, September copper /zigman2/quotes/210058775/delayed HGU20 +0.23% rose 0.6% to $2.9015 a pound. October platinum /zigman2/quotes/213501024/delayed PLV20 -2.77% lost 0.7% to $837 an ounce, but September palladium /zigman2/quotes/213028404/delayed PAU20 +0.03% rose nearly 0.8% to $2,025.10 an ounce.