Gold slips as U.S. jobless claims fall, China claims virus cases contained

Spot gold was flat at $1,726.69 per ounce

  
Gold bars are displayed during a photo opportunity at the Ginza Tanaka store in Tokyo September 7, 2009.

Gold bars are displayed during a photo opportunity at the Ginza Tanaka store in Tokyo September 7, 2009.

REUTERS/Yuriko Nakao

Gold prices dipped on Thursday as declining jobless claims in the United States and reports of China bringing its latest coronavirus outbreak under control weighed on the safe-haven metal.

Spot gold fell 0.3% to $1,720.48 per ounce by 10:21 a.m. ET (1421 GMT). U.S. gold futures were down 0.5% at $1,726.60 per ounce

"Gold is softer and giving up earlier gains due to some positive reports from Beijing that they have contained the coronavirus outbreak," said Edward Moya, senior market analyst at broker OANDA.

"The jobless claims data is getting better. The economic situation might be getting better at last."

Initial claims for state unemployment benefits dropped for the 11th straight week, pushing claims further away from a record 6.867 million in late March, but came above Reuters' estimates. 

Beijing, which recently recorded its largest number of infections since early February, has brought its latest coronavirus outbreak under control, a Chinese medical expert said on Thursday. 

Gold had earlier hit a near one-week high of $1,736.49.

However, "The long-term prospects are still supporting higher moves as the virus woes are still there. ... The central bank stimulus with lower interest rates are not going way anytime soon," Moya said.

Federal Reserve Chair Jerome Powell told lawmakers this week that "significant uncertainty remains about the timing and strength of the recovery."

The Bank of England increased its bond-buying program by a further 100 billion pounds, but sharply slowed the pace of its purchases. 

"Ongoing risks to the global economic recovery, especially with regards to recent spikes in virus cases in both the U.S. and China continue to underpin (gold's) price action. However, a lack of physical demand is likely to see gold hold $1,700-$1,750 over the near term," MKS PAMP said in a note.

Elsewhere, palladium was little changed at $1,922.07 per ounce, while platinum XPT= fell 1.8% to $803.77.

Silver was down 1.3% at $17.36.

(Reporting by Diptendu Lahiri in Bengaluru; editing by Jonathan Oatis) ((Diptendu.Lahiri@thomsonreuters.com; within U.S. +1 651 848 5832; outside U.S. +91 80 6749 3683;; Reuters Messaging: diptendu.lahiri.thomsonreuters.com@reuters.net))

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