Gold gains 1% as Wall Street rally fizzles, dollar dips
By Asha Sistla (Reuters) - Gold rose more than 1% on Thursday as the dollar retreated and Wall Street paused its recent rally as dismal U.S. trade data overshadowed slightly upbeat labor market numbers and optimism about an economic rebound
By Asha Sistla
(Reuters) - Gold rose more than 1% on Thursday as the dollar retreated and Wall Street paused its recent rally as dismal U.S. trade data overshadowed slightly upbeat labor market numbers and optimism about an economic rebound.
Spot gold was up 1.1% to $1,716.60 per ounce at 12:38 p.m. EDT (1638 GMT). U.S. gold futures rose 1.1% to $1,723.20.
"Equity markets are still trading in the red and for gold market participants, that's interpreted as a bout of risk-off and is leading to an increase in investment demand," said Daniel Ghali, commodity strategist at TD Securities.
After a strong rally on Wednesday, U.S. stock indices edged lower despite data showing U.S. weekly jobless claims dipped below 2 million for the first time since mid-March.
Re-igniting worries about an economic slowdown, the U.S. trade deficit surged in April as the COVID-19 pandemic upended the global flow of goods and services, pushing exports to a 10-year low.
The dollar also held near its lowest level in about three months, making gold cheaper for holders of other currencies.
While gold has shown it can rally in a risk-on environment as well, "an equity market correction could also weigh on gold in the near term should liquidity needs materialise again," Standard Chartered analyst Suki Cooper said in a note, forecasting prices to average $1,700 in the third quarter.
Earlier in the day, the European Central Bank beefed up its bond-buying programme to support the euro zone economy, briefly boosting equities.
Holdings in the SPDR Gold Trust ETF rose to 1,133.37 tonnes on Wednesday, the highest since April 2013.
Gold-backed exchange-traded funds (ETFs) added 623 tonnes of the metal worth $34 billion to their stockpile from January to May, exceeding in five months every full-year increase on record, the World Gold Council said on Thursday.
Elsewhere, palladium fell 2.7% to $1,897.02 per ounce, while platinum climbed 1.2% to $835.88. Silver rose 0.5% to $17.75.
(Reporting by Asha Sistla in Bengaluru; Editing by Steve Orlofsky and Paul Simao)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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