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Gold futures edged lower on Thursday as stock markets across the globe attempted to stabilize after a slide Wednesday as cases of COVID-19 rose in the U.S. and other countries. A firmer U.S. dollar also was creating some headwinds for commodities priced in the currency like bullion.
The U.S. dollar was up 0.3% as gauged by the ICE U.S. Dollar Index early Thursday, while the Dow Jones Industrial Average and the S&P 500 index looked set to steady after the worst selloff since June 11, partly sparked by an acceleration in the rate of daily new cases of coronavirus.
A sharp rise in cases in several U.S. states in particular created uncertainty about restarting businesses and the shape of the economic recovery from downturn induced by measures to curtail the spread of the contagion.
At least partly for that reason, many metals experts are bullish about the near-term outlook for gold after it rose to seven year highs this week.
Naeem Aslam, chief market analyst at AvaTrade, in a Thursday research report said that there are “five key factors [that] are likely to push gold prices higher in the coming days,” which he said includes worries about an emerging second wave of the disease, trade tensions between China and the U.S., possible on European imports to the U.S., rising U.S. unemployment, and weak coming corporate earnings.
He said a resolution in some of those issues and a coronavirus vaccine could deflate prices for the gold bulls.
August gold GCQ20, -0.30% was off $4.50, or 0.3%, at $1,770.60 an ounce, after declining 0.4% on Wednesday. Prices on Tuesday settled at the highest for a most-active contract since Oct. 4, 2012.
July silver SIN20, -0.45%, meanwhile, retreated 7 cents, or 0.4%, at $17.605 an ounce, after tumbling 2.2% on Wednesday.
For the week, gold futures are looking at a 1.1% weekly gain thus far, silver prices have declined 1.3% over the period, while the dollar index has slipped 0.2% over the week.
