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Gold Rises on Poor U.S. Job Numbers, Rising COVID-19 Cases

CommoditiesNov 26, 2020 12:03AM ET
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© Reuters.

By Adam Claringbull

Investing.com – Gold was up on Thursday morning in Asia, as investors looked to the save-haven asset on the back of weak U.S. jobs data, rising COVID-19 numbers, and as a hedge against a fall in stocks.

Gold futures edged up 0.19% at $1,809 by 1:03 AM ET (5:03 AM GMT).

After recent falls on the back of promising COVID-19 vaccine news sending investors toward risk-positive assets, gold is back up as U.S. data highlights the ongoing reality of the coronavirus epidemic. Stocks reached record highs earlier in the week.

U.S. weekly jobless claims have risen for the second week running, with 778,000 claims filed, as opposed to the forecast 730,000. The numbers pulled back the optimism that had been fueling stocks and other risk-on investments, demonstrating that the effects of the COVID-19 pandemic are far from over yet.

The data clearly highlighted the divergence between positivity driven by the vaccine and the near-term COVID-19 issue," Stephen Innes, chief global market strategist at financial services firm Axi, told Reuters, noting that the report also boosted the chances for further stimulus.

"The vaccine narrative has watered down gold's appeal immensely and it will continue to do so until we finally move from a deflationary world into an inflationary world," Innes added.

Global coronavirus numbers show no signs of slowing their growth at present, with cases worldwide past the 60 million mark, 12.77 million of them in the U.S alone, according to Johns Hopkins University data.

The U.S. Federal Reserve released the minutes from the latest Federal Open Market Committee meeting. Policymakers have been looking into ways to support the markets, with some analysts expecting the Fed to extend bond purchase maturation. This, combined with a weakening dollar, is giving some support to gold, which is seen as a hedge against inflation.

"With the widespread distribution of a coronavirus vaccine unlikely before H2 2021, central banks are likely to remain accommodative," ANZ analysts said in a note.

Gold Rises on Poor U.S. Job Numbers, Rising COVID-19 Cases
 

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Comments (1)
Ridha B younes
Ridha B younes Nov 26, 2020 3:20AM ET
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still struggling to rise gold did not rise and it may fall no one knows anything mystery or surprise if it rises .a huge chunk of investors lost a lot of money during these ten hours i didn't i got away people losing trust in the institutions that should clarify the road not make obstacles in sports you get all the minute details when teams are worth billions of dollars we traders are forced to stay ignorant may be we make profit God forbid
Ridha B younes
Ridha B younes Nov 26, 2020 3:20AM ET
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gold price might surprise you
la popeye
la popeye Nov 26, 2020 3:20AM ET
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gold is making step down, the a lateral break, the a next step down and the lateral again. Ni free market act like this.
 
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