Gold inched lower on Thursday as the dollar firmed, but losses were limited as investors braced for US jobless claims data due later in the day, which should give clues on how much the coronavirus is hurting the world's biggest economy.
Spot gold was down 0.1 percent at $1,589.71 per ounce by 1050 GMT, while US gold futures rose 0.7 percent to $1,602.60 an ounce. "Both bulls and bears can build a narrative in gold right now, with low inflation, weak physical demand from key buyers and the dollar's strength for the bears and the economic shock, negative real yields and cenbank easing for bulls," said Saxo Bank analyst Ole Hansen.
Dollar held onto overnight gains
"The oil price jump is adding some 'risk on' to stocks as well, which is probably reducing demand for gold a little bit." European shares rose in choppy trading, while crude oil futures jumped 10 percent after US President Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their oil price war.
The dollar held onto overnight gains as investors rushed to the security of the world's most liquid currency. Market participants awaited weekly jobless claims report from the US Labor Department due at 1230 GMT for an indication of the economy's health. Goldman Sachs expects the jobless claims to jump to a record 6 million for the March 22-28 week. The United States has the highest number of confirmed cases of COVID-19. Nearly 188,000 people have been infected and 4,000 have died, according to a Reuters tally of data.
"Should stocks come under pressure over the next couple of weeks as the coronavirus death toll in the US and elsewhere accelerates rapidly, gold may find itself a haven once again for risk-averse investors," OANDA analyst Craig Erlam said in a note. Indicative of sentiment, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.18 percent to 968.75 tonnes on Wednesday, their highest since October 2016.
Among other precious metals, palladium rose 3.5 percent to $2,294.27 per ounce, while platinum edged 0.2 percent higher to $718.62. "Auto data out of the US and Europe paint a bleak picture. Chinese data is beginning to show green shoots and should be supportive to palladium and to a lesser extent platinum," MKS PAMP said in a note. Silver gained 0.9 percent to $14.13 per ounce.