Gold prices ticked up at the last trading session of the week.
The gains prevailing at the precious metal market are coming on reports pointing jobs data prevailing in the world’s largest economy hinting a lot still needed to be done coupled with high uncertainty over the latest U.S. stimulus measures long-awaited by traders.
At about 6.30 am, WAT (West African Time) Gold Futures traded at $1,841/ounce showing a gain of 0.20%. The U.S dollar, which usually moves inversely to the precious metal, was down at the early hours of trading in London.
What this means: The recent American jobs data revealed 853,000 jobless claims were filed last week more than the 725,000 in forecast as such data suggests that the number of Jobless claims increased as more companies shut down due to ever-increasing numbers of COVID-19 cases prevailing at the world’s largest economy.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the prevailing circumstances affecting the precious metal market;
“As we move into 2021, I would expect gold will simply become an inverse reaction function of the US dollar, which prevailed from 2010-2018. If you think the EURUSD goes to 1.25, you unequivocally need to own gold.
“In the meantime, the lack of progress on the US fiscal deal the next and possibly more powerful knockdown to gold and silver could come from growing optimism over the vaccine.
“There is enough positive vaccine feel good to keep gold and silver pressured, near-term. The FDA approval could come as soon as Friday or Saturday, with the first US injections happening on Sunday or Monday, according to the chief adviser to the Trump administration on vaccine development,” Innes said.
What to expect; Investors, however, anticipate news from COVID-19 vaccines might continue to undermine gold and silver’s “safe-haven” demand in the mid-term as it is rolled out.