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Gold futures on Thursday traded higher as uncertainty about the shape of the recovery for global economies from the COVID-19 pandemic and low-interest rate policies by central bankers have helped to bolster bullion’s value.
“The market is flooded with cash from central banks around the world which is inflating gold prices at this highly uncertain time,” wrote Craig Erlam, senior market analyst at Oanda, in a daily research report.
Metals trading will effectively be closed on Friday due to Good Friday holiday.
June gold on Comex GCM20, +1.41% was up $20.20, or 1.2%, at $1,704.50 an ounce Thursday after gaining less than 0.1% on Wednesday. A settlement at this level would mark the metal’s highest level since around 2012. For the week, the precious commodity is on track to gain 3.6%.
May silver SIK20, +1.74% was gaining 27 cents, or 1.8%, at $15.475 an ounce, following a similar advance in the previous session. For the week, the white metal is on track for a gain of 6.8%.
Gold prices gained on Wednesday after minutes from the Federal Reserve’s March 3 and March 15 meetings showed that Fed staff’s worst-case scenario was that an economic recovery wouldn’t take hold until next year.
On top of that, the recent barrage of economic stimulus is expected to lead to deflation, which would support buying of precious metals, commodity experts say.
A batch of important U.S. economic reports and a speech from Fed Chairman Jerome Powell at 10 a.m. Eastern Time also could influence gold prices. A report on weekly jobless claims is due at 8:30 a.m., which could show some 6 million seeking unemployment benefits after 6.6 million job losses last week.
In other economic reports, investors will watch for a report on producer prices due at the same time as jobless claims and later in the morning readings of consumer sentiment from the University of Michigan and whole sale trade in goods.
