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Gold gains on higher U.S. jobless claims, economic recovery fears

· Gold recovered on Thursday from a side of more than 3% in the last session, after U.S. jobless claims unexpectedly topped one million again and the Federal Reserve minutes reiterated concerns over economic recovery.

· Spot gold rose 0.6% to $1,940.14 per ounce. U.S. gold futures settled down 1.2% to $1,946.50.

· “The Fed minutes reiterated the need for people to own gold, they were still concerned about the coronavirus and its impact on the economy, that shows they want to stay accommodative and help consumers stay afloat,” said Michael Matousek, head trader at U.S. Global Investors.

· Minutes from the U.S. central bank’s last policy meeting showed policymakers were concerned the economy faced a highly uncertain path and more monetary support may be needed, although they downplayed the need for yield caps and targets.

· An unexpected rise in U.S. jobless claims to above 1 million last week and weaker U.S. equities was also helping gold, analysts said.

· The dollar index at near one-week high, however capped gold’s gains, making the non-yielding bullion expensive for holders of other currencies.

· “The main fundamentals behind gold have not changed,” said Edward Meir, an analyst at ED&F Man Capital Markets.

“Stimulus is still coming in and it’s very pre-mature to say we’re recovering globally and should see higher rates and stronger dollar; we are many months away from that.”

· Central banks have rolled out massive stimulus and cut interest rates to near zero to combat the economic toll from the new coronavirus crisis, prompting over 27% gains for the year in gold, considered a hedge against inflation and currency debasement.

· Elsewhere, silver gained 1.2% to $27.04 per ounce, platinum dipped 2.2% to $911.40, and palladium rose 0.3% to $2,163.09.

· Rise in U.S. weekly jobless claims clouds labor market recovery

The number of Americans filing a new claim for unemployment benefits rose unexpectedly back above the 1 million mark last week, a setback for a struggling U.S. job market crippled by the coronavirus pandemic.

Still, in a sign some rehiring is underway, the rolls of those continuing to receive jobless benefits is slowly declining, the Labor Department reported on Thursday, and other data indicated a recovery from the recession triggered by COVID-19 continues, though at a more fitful pace than earlier.

Initial claims for state unemployment benefits rose to a seasonally adjusted 1.106 million for the week ended Aug. 15, from an upwardly revised 971,000 in the prior week. Economists polled by Reuters had forecast925,000 applications in the latest week.

While new claims are up, the number of people continuing to collect jobless benefits beyond the first week fell to the lowest level since April. So-called continuing claims declined to 14.844 million in the week ending Aug.8 from a revised 15.480 million in the prior week. Economists polled by Reuters had forecast continued claims at 15 million.

· Fed Chair Powell to speak on Fed's framework review next Thursday

Federal Reserve Chair Jerome Powell could deliver a sneak peak into the U.S. central bank’s efforts to revamp its approach to monetary policy next Thursday when he addresses the Kansas City Fed’s annual central banking conference.

Powell will discuss the Fed’s monetary policy framework review at 9:10 EDT (1310 GMT) on the opening day of the conference, the Fed said on Thursday.

Investors have been eagerly awaiting details on possible changes to how the Fed targets inflation that, in the current environment, could mean the Fed sticks with aggressive stimulus measures longer than under its previous rubric.

Minutes of the Fed’s July meeting, released on Wednesday, showed policymakers are nearing agreement on refinements to the Fed’s framework, though they did not provide any detail.

U.S. central bank chiefs have in the past used the annual gathering, usually convened in Jackson Hole, Wyoming, to signal important policy shifts.

· U.S. recovery grinds along as coronavirus case growth eases

Americans made tentative moves back to restaurants and gyms over the past week, hiring advanced across a sample of industries and a rise in job postings suggested it may continue, signs the U.S. recovery grinds along, albeit not without some setbacks.

High-frequency data estimating retail stores visits and employment across industries as well as broader indexes of the recovery, after largely plateauing during a summertime surge in coronavirus cases, mostly moved higher through early and mid-August.

Defying worries, at least so far, that the expiration of extra unemployment insurance benefits in July would lead to an immediate collapse of spending, August opened “on the right foot,” Oxford Economics chief U.S. economist Gregory Daco wrote after the company’s recovery index jumped 1.3 percentage points for the week ended Aug. 7.

· CORONAVIRUS UPDATES:

Global cases: More than 22.8 million

Global deaths: At least 796,330

U.S. cases: More than 5.7 million

U.S. deaths: At least 177,394

- CDC chief says deaths could start to slow next week

Deaths caused by Covid-19 will begin to decline over the next week, Director of the Centers for Disease Control and Prevention Dr. Robert Redfield said Thursday.

Daily new cases of the coronavirus have been on a sustained decline since the end of July, according to data compiled by Johns Hopkins University. Deaths, which lag behind new cases as people fall ill, become hospitalized and die, have remained stubbornly high, at roughly 1,000 new Covid-19 deaths per day, on average, according to a CNBC analysis of Hopkins data.

- Coronavirus in U.S. Congress: 16 members have tested or been presumed positive

At least 16 members of the U.S. House of Representatives and Senate - nine Republicans and seven Democrats - have tested positive or are presumed to have had COVID-19, with Senator Bill Cassidy becoming the latest on Thursday.

- Germany, Spain record highest daily coronavirus infection rate since April as cases surge across Europe

Germany recorded 1,707 new cases of the coronavirus in the last 24 hours, reflecting its highest daily toll since April. The country has now reported 228,261 cases of the virus, with 9,253 related deaths, according to data compiled from the Robert Koch Institute for infectious diseases.

Spain has seen another 3,715 new cases of the virus confirmed in the past 24 hours, with an additional 127 deaths. As in Germany, Spain’s daily infection rate has not been this high since late April.

Meanwhile, France’s health ministry reported 3,776 new Covid-19 infections on Wednesday, with the daily tally going above 3,000 for the third time in the last five days. France has recorded a similar number of cases to Italy, with 30,434 deaths.

- Italy sees 845 new COVID-19 cases, highest since end of lockdown in May

· Russia says coronavirus vaccine to be tested on 40,000 volunteers amid safety concerns

Russia claimed its coronavirus vaccine, the first to be registered worldwide, will soon be tested on 40,000 people in order to test its reliability.

· Japan's consumer prices flat as pandemic stokes fears of deflation

Japan’s core consumer prices were stubbornly unchanged in July, dashing hopes for a modest rise as the coronavirus pandemic hit household demand and revived fears of a national plunge back into deflation.

A slow economic recovery from last quarter’s record slump is expected to weigh on prices as consumer demand collapsed amid resurgent infections, which will in turn hit profits, jobs and business investment, analysts say.

· Trump redoubles vow to withdraw troops from Iraq; eyes prospects for oil deals

U.S. President Donald Trump on Thursday redoubled his promise to withdraw the few U.S. troops still in Iraq, but said Washington would remain ready to help if neighboring Iran took any hostile action.

Speaking during his first meeting with Iraqi Prime Minister Mustafa al-Kadhimi, Trump said he looked forward to the day when U.S. troops could exit the country, but said U.S. businesses were already making “very big oil deals” there.