Metals Stocks: Gold prices bounce higher as traders watch for ECB decision, jobless claims

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Gold prices rose on Thursday as investors awaited policy actions by the European Central Bank which could influence gold trade.

The ECB is expected to expand its €750 billion Pandemic Emergency Purchase Program by €500 billion after ECB President Christine Lagarde downgraded the central bank’s eurozone gross domestic product estimate to a drop between 8% and 12% this year.

The ECB’s updated policy statement will be released at 7:45 a.m. Eastern Time, and will be followed by a news conference featuring Christine Lagarde, 45 minutes later.

Gold buying has been buoyed by central bank stimulus measures to limit the economic harm from the COVID-19 pandemic, but signs of economies coming back to life from lockdowns to halt the spread of the deadly infection has dulled bullion’s appeal.

Gold for August delivery GCQ20, +0.48% on Comex was trading $9.70, or 0.6%, higher at $1,714,50 an ounce, after tumbling 1.7% on Wednesday, amid a strong rally in global equities.

“Gold is recovering from yesterday’s steep decline as the ECB will likely announce mores stimulants,” wrote Peter Cardillo, chief market analyst at Spartan Capital Securities, in a daily research note.

Meanwhile, July silver SIN20, +0.48% added 5 cents, or 0.3%, at $18.005 an ounce, following a 1.7% drop in gold’s sister metal on Wednesday.

Investors in precious metals also may watch for a report on U.S. weekly new jobless claims to gauge whether the worst of the impact of the viral outbreak has passed.

On Wednesday, gains in the stock market followed data from Automatic Data Processing Inc., which showed the private sector shed 2.76 million jobs in May. That was well below forecasts from economists surveyed by Econoday who expected a loss of 8.66 million.

The report on claims will be released at 8:30 a.m. ET.

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