Gold near record peak as investors fret over U.S. recovery
Gold prices surged, hovering towards a record peak scaled in the previous session as dismal U.S. jobs data hammered the dollar, while increasing worries about a recovery in the pandemic-ravaged global economy boosted the safe-haven metal's appeal.
Spot gold was up 0.6 percent at $2,051.20 per ounce by 0831 GMT, having hit an all-time high of $2,055.92 on Wednesday. U.S. gold futures rose 0.7 percent to $2,052.50. The safe-haven metal has rallied more than 34 percent this year amid coronavirus crisis and bets for more stimulus measures.
The greenback slumped to its lowest level in more than two years versus key rivals after three Federal Reserve policymakers warned the pandemic would continue to hurt the U.S. economy, with cases in the country topping 4.7 million.
Data released yesterday showed U.S. private payrolls growth slowed sharply in July, indicating the labour market recovery was faltering. A separate survey by the Institute for Supply Management showed U.S. services industry activity gained momentum in July as new orders rose to a record high however, a drop in hiring stoked worries about upcoming job figures.
Investors now await weekly unemployment benefit claims data due later in the day, which is expected to show a slight decline in initial claims to 1.415 million last week from 1.434 million in the preceding week.
The recovery in employment is seen as critical to the U.S. economy, with more than 30 million people on jobless benefit, while markets count on another fiscal stimulus to support the economy. Unemployment payments of $600 a week for the tens of millions of Americans who lost their jobs in the pandemic expired last Friday.
On Wednesday, Top congressional Democrats and White House officials appeared to harden their stances on new coronavirus relief legislation. Investor focus remains on talks over a new U.S. stimulus package as negotiations headed toward an end-of-week deadline with no sign of an agreement.
The greenback against a basket of currencies traded 0.1 percent up at 92.93, having touched a low of 92.52 earlier, its lowest since May 2018. The U.S. Treasury yields edged lower, with the benchmark 10-year note yield trading at 0.537 percent.