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Gold futures struggled for direction on Thursday, pressured by a fall in weekly U.S. jobless claims, but also finding some support from data showing a monthly jump in the U.S. trade deficit.
“The U.S. jobless claims number was “better but the trade balance data was really awful,” said Naeem Aslam, chief market analyst at AvaTrade, in a note, adding that the trade balance data helped to support prices for gold.
Initial jobless claims fell by 130,000 to a seasonally adjusted 881,000 in the last week of August, the Labor Department said Thursday. Government data, however, revealed that the trade deficit jumped 18.9% in July owing to a big snapback in imports.
December gold GCZ20, -0.58% GC00, -0.58% edged down by $2.60, or 0.1%, at $1,942 an ounce, after trading at highs above $1,950 following the trade deficit data. Prices declined by 1.7% on Wednesday.
December silver SIZ20, -2.00% SI00, -2.00%, meanwhile, was down 5 cents, or 0.2%, at $27.35, following its 4.4% skid in the previous session.
“Gold is caught in a range, with August’s midmonth lows as the correction low-point and the early August highs as the upper bound,” said Peter Spina, who is president of GoldSeek.com and SilverSeek.com, providers of news and analysis for the precious metals.
Still, “gold has made a quick move higher, and in a multiweek grinding action, exciting both bulls and bears,” he told MarketWatch, adding that “this may go on for a bit more.”
In Thursday dealings, the U.S. dollar was nearly unchanged, as gauged by the ICE U.S. Dollar Index DXY, +0.04%, a measure of the buck’s strength against a half-dozen currencies. After touching a two-year low, the index has gained 0.5% so far this week.
Gold, which is priced in dollars, often trades inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of the metal to holders of other currencies.
For now, gold is in a “healthy consolidation phase after a quick price run-up,” said Spina. “Gold is priming for its next move above $2,000 to fresh record highs.”
Given all that, Spina believes “this is an excellent time to be accumulating, specifically the miners,” pointing out that they are “trading very cheaply compared to historic ratios, they have yet to catch up to even these new higher prices.”
However, growing expectations for a vaccine or effective remedies against the COVID-19 pandemic, also have weighed on precious metals’ pricing lately, experts say.
Bullion has been boosted by economic uncertainty stoked by the pandemic and by the outsize monetary efforts implemented by central bank’s to stem the harm to business activity across the world, but a cure for the deadly disease could dislodge gold from its bullish perch.
“If a vaccine is imminent, it is safe to assume that central bankers will take their foot off the policy accelerator,” wrote Stephen Innes, chief global markets strategist at AxiCorp, in a daily note.
“The market may start rebalancing from gold to equities in the short term; this could be something to keep an eye on,” he wrote.
Among other metals traded on Comex, December copper HGZ20, -1.70% fell 0.9% to $2.994 a pound. October platinum PLV20, -1.04% tacked on 0.2% to $906.30 an ounce and December palladium PAZ20, +2.13% added 5.5% to $2,392.30 an ounce.
