Gold ticks higher as weak U.S. data boosts stimulus bets
By Shreyansi Singh (Reuters) - Gold edged up in choppy trade on Thursday as data showing a weak U.S. labor market bolstered bets for more government stimulus, buoying bullion's appeal as an inflation hedge and countering pressure from a resilient dollar. Spot gold was up 0.2% at $1,847.36 per ounce at 10:56 a.m
By Shreyansi Singh
(Reuters) - Gold edged up in choppy trade on Thursday as data showing a weak U.S. labor market bolstered bets for more government stimulus, buoying bullion's appeal as an inflation hedge and countering pressure from a resilient dollar.
Spot gold was up 0.2% at $1,847.36 per ounce at 10:56 a.m. EST (1556 GMT), while U.S. gold futures fell 0.4% to $1,846.70.
The number of Americans filing first-time applications for unemployment benefits surged last week.
"This significant jump is reminding everyone that the labor market situation is still dire, and it's going to warrant more stimulus," said Edward Moya, senior market analyst at OANDA, adding that concerns over the ongoing coronavirus pandemic remained supportive for gold.
But the biggest uncertainty for the precious metal will be the direction of U.S. Treasury yields, Moya said.
While gold is considered a hedge against the inflation and currency debasement that can result from widespread stimulus, a recent jump in bond yields has challenged that status as it increases the opportunity cost of holding non-yielding bullion.
Treasury yields shot higher in the past week through Tuesday on expectations for the fresh stimulus.
President-elect Joe Biden is scheduled to unveil a stimulus package proposal on Thursday that could exceed $1.5 trillion.
Federal Reserve Chair Jerome Powell's participation in a virtual event at 12:30 p.m. EST (1730 GMT) on Thursday is also on investors' radar.
But looking ahead, "both a stronger dollar and higher interest rates are going to be a negative factor for precious metals," said Chris Gaffney, president of world markets at TIAA Bank.
On the technical front, $1,890 posed key resistance for gold, he added.
Meanwhile, the dollar also held onto gains versus other currencies.
In other metals trading, silver gained 1.7% to $25.57 an ounce, platinum climbed 1.5% to $1,109.98 per ounce and palladium was up 0.3% at $2,391.08.
(Reporting by Shreyansi Singh in Bengaluru; Editing by Paul Simao)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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