Gold prices fell on Thursday as the yellow metal sought to record its first loss in three sessions, as investors saw signs of improvement in the latest economic data.
The strength of the US dollar also helps put pressure on gold. “The dollar has recovered from rising trade tensions between the United States and China,” said analysts at Zaner Metals. “In addition to the trade-influenced rise in the dollar, we also see threats of trade disputes that keep the Chinese economy on a slower rise in the embargo and which in turn could slow the improvement in physical demand of China into gold. “
Gold continued decline early “after a handful of better-than-expected PMI eurozone readings, a sign that a better economy is behind some sure desires to settle in and return to background “, the Zaner Analysts.
Preliminary composite readings of business activity in the euro area showed that the French purchasing managers’ index fell from 11.1 in April to 30.5 in May, while the German PMI composite index was from 17.4 to 31.4 in Germany, and the UK composite index rose to 28.9 from 13.8 in April. Any reading below 50 indicates deterioration of conditions.
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Gold traders also digested US economic data on Thursday. On a real or unadjusted basis, a total of more than 4.4 million unemployed Americans applied for unemployment benefits through the states or a temporary federal assistance program last week. On an adjusted basis, unemployment insurance claims amounted for the first time to 2.44 million.
The 2.4 million figure is “terrible”, but “in the midst of this misery, there is hope: the number of people filing claims has dropped for the seventh consecutive week,” wrote analysts for Wells. Fargo Securities in a note.
US private sector companies United States They reported a slightly slower rate of contraction in May, IHS Markit reporting that its flash manufacturing purchasing index rose to 39.8 in May from 36.1 in April . The data suggest that “activity only resumes progressively at best as the first restrictions against coronaviruses are lifted,” said Andrew Hunter, US economist at Capital Economics.
Analysts also noted that the minutes of the Federal Open Market Committee, which established the policy, helped fuel fears of deflation that it would not be optimistic about gold which tends to attract offers in inflationary environments. .
“The FOMC minutes reinforced the Committee’s opinion that a slow economic recovery has also reached a deflationary deal that is not bullish for gold,” wrote Stephen Innes, chief of global market strategy at AxiCorp, in a daily research note. .
Overall, Fed minutes released half an hour after official gold price settlements on Wednesday said the central bank would use “the full range” of tools to support the economy during the difficult pandemic .
Gold for delivery in June at Comex
GC00,
GCM20,
down $ 23.90, or 1.4%, to $ 1,728.20 an ounce, after finishing up 0.4% at the close on Wednesday.
Meanwhile, Julio Plata
SIN20,
It fell 43.6 cents, or 2.4%, to $ 17,595 an ounce, after increasing 0.7% in the previous session.
Precious metal traders may be disappointed as Fed promises more support [April] the meeting has not materialized “since the meeting, analysts at Zaner Metals wrote in a daily report.
Elsewhere in the metals trade, July copper
HGN20
it fell 0.8% to $ 2,439 per pound.
PLM20
lost 6.7% to $ 871.20 an ounce and June palladium
PAM20,
it lost 4.3% to $ 2,066.90 an ounce.