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Gold futures found only modest support on Friday, as traders parsed data showing a loss of more than 20 million U.S. jobs in April tied to efforts to stop the spread of the COVID-19 pandemic, but prices for the precious metal look to end the week a bit higher.
The coronavirus pandemic destroyed 20.5 million U.S. jobs in April, driving the unemployment rate to a post Word War II high of 14.7% as the country faced its biggest economic crisis in almost a century, according to data from the Labor Department Friday. Still, the loss of jobs was a bit less the 22.1 million forecast of economists surveyed by MarketWatch.
“It is unexplainable that the shocking headline that the unemployment rate in the United States has climbed to levels not seen since the 1940s has not resulted in a substantial push higher in gold prices” Friday, said Jameel Ahmad, global head of currency strategy and market research at FXTM.
“It does still appear that the relentless manner in which investors continue to look at very bad economic news as very good news for stock markets is pushing gold prospects back away to sea,” he told MarketWatch.
On Comex, June gold GCM20, -0.17% rose $1, or 0.06%, at $1,726.80 an ounce, spending part of the session seesawing between modest losses and gains.
Meanwhile, July silver SIN20, +1.89% rose 36 cents, or 2.3%, at $15.95 an ounce, following a 3.8% surge in the precious and industrial metal.
For the week, gold is on track for a weekly rise of 1.5%, while silver futures are aiming for a 6.7% advance over the period.
U.S. benchmark stock indexes were higher in Friday dealings, despite the worst U.S. unemployment rate since the Great Depression.
A report that top U.S. and China trade negotiators held a telephone call, pledging to create favorable conditions for their phase-one trade deal, helped to bolster appetite for assets considered risky and limit the upside in precious metals. The call, reported by China’s state-run Xinhua News Agency, came after President Donald Trump threatened to “terminate” a phase-one Sino-American trade.
Still, gold has managed to hold above $1,700 “in spite of the comeback in risk sentiment” and that shows buying interest in gold continues, said Ahmad.
“We have now reached a new crossroads in the coronavirus era where governments are attempting to open their economies, and the success they can have in doing this, while keeping the disease outbreak maintained, will be a critical barrier of assessment for where gold prices can go between the next two [to] three months,” he said.
Among other metals, July copper HGN20, +1.51% rose 1.2% to $2.41 a pound, with prices up over 4% for the week. July platinum PLN20, +1.71% added 1.7% to $795.70 an ounce, headed for a weekly climb of nearly 3%, while June palladium PAM20, -0.29% shed 0.5% to $1,825.80 an ounce, building a loss of over 3% on the week.
