· Gold prices edged lower on Thursday as the dollar held firm, while investors awaited key U.S. jobless data amid mounting signs of a recession due to the worsening coronavirus outbreak.
Spot gold fell 0.4% to $1,584.50 per ounce by 0312 GMT, after rising 1.2% on Wednesday. U.S. gold futures rose 0.4% to $1,597.20 per ounce.
· "It is tracking against the dollar index. But primarily, gold is in consolidation and sideways movement than anything else," said Avtar Sandu, a senior commodities manager at Phillip Futures.
The dollar held overnight gains as investors rushed to the security of the world's most liquid currency given the massive disruption to global trade due to the pandemic.
Factories fell quiet across much of the world in March, with sharp slowdowns in Germany and Japan overshadowing a modest improvement in China, while new orders in the United States slumped to an 11-year low.
The metal is taking cues from other markets in the short term, but "fundamentals are still supportive in the long run" amid quantitative easing and lower interest rates, Sandu said.
· Gold is considered an attractive investment during times of political or economic uncertainty. It is highly sensitive to interest rates, as lower rates reduce the opportunity cost of holding the non-yielding bullion.
· The World Health Organization's director-general, Tedros Adhanom Ghebreyesus, said on Wednesday that his agency, the World Bank and the International Monetary Fund backed debt relief to help developing countries cope with the pandemic's social and economic consequences.
Boston Federal Reserve Bank President Eric Rosengren said social distancing efforts meant to contain the outbreak could lead the unemployment rate to "rise dramatically."
Asian equities fell for a second session, after a dire warning about the U.S. coronavirus death toll had investors bracing for more bad news from weekly U.S. jobless figures due at 1230 GMT.
· According to a Reuters survey of economists, initial claims for jobless benefits last week probably surpassed the week-ago record of 3.3 million, with 3.5 million expected. Investors also awaited U.S. non-farm payroll data due on Friday for further clues about the impact of the outbreak.
The virus has so far infected more than 878,300 people across the world and over 43,400 have died, according to a Reuters tally.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.18% to 968.75 tonnes on Wednesday.
· Gold Price Analysis: On the back foot below $1,600 inside falling channel
While defying Wednesday’s recovery moves, Gold prices drop to $1,585, down 0.40%, amid the early Thursday’s trading session.
In doing so, the yellow metal remains inside a one-week-old descending trend channel while also staying below 200-bar SMA and 61.8% Fibonacci retracement of its March 09-16 declines.
That said, the bullion sellers also take clues from the bearish MACD while currently targeting 50% Fibonacci retracement near $1,577. Though, the channel’s support, around $1,561, could question further downside.
On the flip side, 200-bar SMA level of $1,603 precedes $1,607 resistance comprising 61.8% Fibonacci retracement.
During the metal’s further advances past-$1,607, the said channel’s upper line, close to $1,616 will be the key to watch.
· Palladium rose 2.9% to $2,280.84 per ounce, while platinum slipped 0.4% to $714.42 an ounce and silver eased 0.4% to $13.95 per ounce.
Reference: Reuters, FX Street
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