Gold holds steady after hitting record high as dollar slips

Image: REUTERS/ Ilya Naymushin

Gold steadied on Thursday after hitting a record high in the previous session as dismal US jobs data hammered the dollar, while increasing worries about a recovery in the pandemic-ravaged global economy kept demand solid for the metal.

Spot gold was up 0.1% at $2,042.14/oz by 3.51am GMT, after hitting an all-time high of $2,055.10 on Wednesday. US gold futures rose 0.4% to $2,056.60.

Markets are coming to terms with the idea that we’re going to have slow growth for a while

"Markets are coming to terms with the idea that we’re going to have slow growth for a while," said DailyFx currency strategist Ilya Spivak, adding that low or negative interest rates were pushing capital into assets like gold that offer nominally better returns.

Gold has rallied more than 34% in 2020 as it is considered an asset that should hold its value while the coronavirus crisis and money printing by central banks erode the value of others.

However, technical indicators point to signs of exhaustion, wit Spivak saying "we might get a pause relatively soon, at least to consolidate".

Adding fuel to gold’s run, rival safe-haven dollar held close to its lowest level in more than two years versus key rivals, after three Federal Reserve policymakers warned the pandemic would continue to hurt the US economy, with cases in the country topping 4.7-million. Also pressuring the dollar, data showed US private payrolls growth slowed sharply in July.

"The only real cure to claw back some economic dignity is that global interest rates remain low for as far as the eye can see and even redoubled amounts of government stimulus," Stephen Innes, chief market strategist at financial services firm AxiCorp, said in a note. Investor focus is now on negotiations over a new US stimulus package.

Silver eased 0.2% to $26.96/oz after hitting its highest level since April 2013 in the last session. Platinum rose 0.1% to $968.46 and palladium was steady at $2,183.35. — Reuters

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