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Gold futures traded higher on Thursday and headed for a fifth straight session gain, as the prospect of protracted period of accommodative central bank policy has emboldened bullion bulls.
On Wednesday, Federal Reserve Chairman Jerome Powell emphasized that monetary policy makers would continue bolstering the economy through low interest rates and hefty asset purchases, as he cautioned that the labor market remained fragile from the COVID-19 pandemic and in need of fiscal spending, speaking at a webcast event hosted by the Economic Club of New York.
“It will require a society-wide commitment, with contributions from across government and the private sector,” Powell said of the economic challenges from the pandemic.
Against that backdrop, gold has been able to gain some altitude after facing an extended downturn.
“Gold is also steady and has so far been unable to climb above $1,850 with traders in a wait and see scenario,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades in a research note.
Gold bulls see prospects elevated for higher gold prices despite some recent headwinds.
“However, just like oil, the long term outlook remains bullish for the yellow metal,” the ActivTrade analyst writes.
U.S. fiscal stimulus and the indication from the Fed that more coronavirus aid will be needed on top of trillions of dollars already spent on limiting the damage from the public health crisis continues to provide support for precious metals.
Gold for April delivery GCJ21, +0.15% GC00, +0.15% was trading $2.30, or 0.1%, higher to $1,845. an ounce, after a 0.3% climb on Wednesday.
Meanwhile, March silver SIH21, +0.47% SI00, +0.47% added 11 cents, or 0.4%, to reach $27.19 an ounce, following a 1.2% decline in the prior session.
Meanwhile, a weekly report from the U.S. Labor Department showed that U.S. initial jobless claims in states fell to 793,000 from revised 812,000 in early February. Weekly claims were expected to total 760,000 last week, according to economists surveyed by Dow Jones, leaving the labor market showing little improvement. Continuing claims for joblessness fell by 145,000 but remained at an elevated 4.5 million.
