Reuters | Jul 02, 2020 20:00
* U.S. employment data due at 1230 GMT
* European stocks rise to near one-week high
* Dollar drops to one-week low
By Nakul Iyer
July 2 (Reuters) - Gold steadied on Thursday below the
previous day's near eight-year peak as investor appetite for
higher-risk assets such as equities improved following
encouraging coronavirus vaccine trials, and ahead of U.S. jobs
data later in the day.
Spot gold XAU= was little changed at $1,772.33 per ounce
by 1131 GMT, easing from the near eight-year high of $1,788.96
hit on Wednesday. U.S. gold futures GCcv1 rose 0.3% to
$1,784.30 per ounce.
"Investors are betting on stock markets rather than on gold.
The short-term scenario is a risk-on mood," said ActivTrades
chief analyst Carlo Alberto De Casa.
However investment demand in gold as a hedge will remain
elevated, offsetting a dip in jewellery and industrial
consumption of the physical metal, he added.
Lowering the cost of holding gold for other currency
holders, the dollar .DXY slipped to a one-week low versus
Encouraging economic data worldwide and hopes for a
coronavirus vaccine pushed European stocks to a near one-week
high, with focus turning to June U.S. employment data and weekly
initial jobless claims data due later in the day .EU
Also lifting the positive market sentiment was news of
COVID-19 vaccine that has shown potential and was found to be
well tolerated in early-stage human trials.
Economists polled by Reuters expect 3 million U.S. jobs to
have been added in June, which would be the most since the
government started keeping records in 1939, though a surge in
coronavirus cases threatens the fledgling recovery. Gold's overall trajectory remained positive, analysts said,
with large monetary stimulus packages to cushion economies from
the fallout of pandemic-induced lockdowns, among other factors,
having helped gold prices rise 16.7% so far this year.
"The central banks are providing liquidity to the market and
this is changing the relative yield structure in asset markets,"
said Quantitative Commodity Research analyst Peter Fertig.
"With flooding the markets (with liquidity), there is an
incentive to invest in gold and not only riskier markets."
Elsewhere, palladium XPD= rose 0.2% to $1,908.64 per
ounce, platinum XPT= steadied at $815.51 per ounce, while
silver XAG= was unchanged at $17.94 per ounce.
Written By: Reuters
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