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Gold off near 8-year peak as upbeat U.S. data, vaccine hopes boost investor risk appetite
Gold prices declined, drifting away from a near 8-year peak hit in the previous session, as demand for safe-haven assets eased following solid U.S. manufacturing data and promising results from a COVID-19 vaccine trial. However, worries of a resurgence in COVID-19 cases limited the downside.
Spot gold eased 0.1 percent to $1,779.20 per ounce by 0835 GMT, having touched a high of $1,789.26 on Wednesday, its highest since October 2012. U.S. gold futures fell 0.2 percent to $1,776.80.
Investor risk appetite improved after data showed manufacturing activity in the United States rebounded more than expected in June, hitting its highest in more than a year, while similar surveys from China, Germany and France all indicated a recovery in factory activity. The ADP National Employment Report showed June private payrolls added nearly 2.4 million jobs, while data for May was revised upward to show payrolls rising 3.065 million.
Risk sentiment was also supported by a COVID-19 vaccine developed by U.S. pharmaceutical giant Pfizer and German biotech firm BioNTech, which showed potential in early-stage human trials.
On Wednesday, new U.S. COVID-19 cases rose by nearly 50,000, according to a Reuters tally, its biggest one-day surge since the start of the pandemic. California reimposed some lockdown measures, banning indoor restaurant dining in much of the state, closing bars and other measures amid a resurgence in COVID-19 cases.
The greenback against a basket of currencies traded 0.3 percent lower at 96.82, having touched a low of 96.81 earlier, its lowest since June 24. The U.S. Treasury yields edged down, with the benchmark 10-year note yield trading at 0.676 percent.
Markets shrugged off concerns about Hong Kong, where police arrested more than 300 people protesting security legislation introduced by China. Although those developments raised concerns about China’s already strained relations with the United States. The U.S. House of Representatives passed legislation that would penalize banks doing business with Chinese officials.
Investors now await June U.S. employment data and weekly initial jobless claims report for clues about the health of the U.S. economy. Non-farm payrolls figures are likely to show an increase of 3 million jobs last month.