June 05, 2020
Gold fades for third straight week on economic recovery hopes
(Reuters) - Gold eased ahead of a highly awaited U.S. jobs report on Friday as markets pinned hopes on an economic recovery, putting the safe-haven metal on track for a third consecutive weekly decline.
Spot gold was down 0.2% at $1,706.91 per ounce as of 0324 GMT. U.S. gold futures slid 0.7% to $1,714.50.
Bullion has declined about 0.8% so far this week, which could be its biggest fall since the week ending May 1.
“Gold prices have been under pressure after a miraculous stock market run that seems to be showing some signs of plateauing,” said Edward Moya, a senior market analyst at broker OANDA.
Asian equities eased from multi-week highs, but were, however, poised for their biggest weekly rise in over eight years.
Investors now wait for the U.S. nonfarm payrolls data for May due at 1230 GMT, which is likely to show payrolls falling by 8 million after a record 20.537 million plunge in April, as per a Reuters survey.
Gold seems ready to climb higher, as the dollar is weakening, trade tensions are here to stay, there are risks of a second coronavirus wave, and the European Central Bank (ECB) showing it can still surprise markets, Moya added.
The ECB on Thursday approved a larger-than-expected expansion of its stimulus package.
U.S. Federal Reserve’s two-day policy meeting next week is also on investors’ radar. The U.S. central bank has injected massive stimulus and cut interest rates to near zero to cushion the blow from the coronavirus pandemic.
More stimulus and lower interest rates tend to benefit gold, which is often seen as a hedge against inflation and currency debasement.
In other metals, palladium rose 0.3% to $1,938.99 per ounce, and platinum climbed 0.2% to $838.37.
Silver was down 0.4% to $17.66, and was set for its first weekly decline in five.