Published on 5/12/2020 10:24:47 AM | Source: Reuters

Gold slides as stocks rally, but still set for weekly gain

Posted in Commodity Top News| #Gold #Commodity

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By Shreyansi Singh

Gold prices eased on Friday as equities rallied, although dollar weakness and a sharp slowdown in U.S. jobs growth in November spurring hopes of additional stimulus aid set gold on track for its first weekly gain in four.

Spot gold was down 0.3% at $1,835.00 per ounce by 10:38 a.m. EST (1538 GMT), having hit its highest since Nov. 23 at $1,847.76 earlier. U.S. gold futures were down 0.2% at $1,837.90.

Dips and pullbacks in gold need to be bought due to negative interest rates across the globe, and the possibility of U.S. stimulus being approved before the end of this year, which would be inflationary, said Michael Matousek, head trader at U.S. Global Investors.

Non-yielding bullion, often seen as a hedge against inflation that is likely to result from the unprecedented stimulus measures, has gained about 3% so far this week.

The U.S. dollar was on course for its worst week since early November, making gold cheaper for holders of other currencies. [USD/]

"Gold prices have support from the dollar weakness and the weaker-than-expected employment data and have held up well despite the acceleration in ETP net redemptions," said Standard Chartered analyst Suki Cooper.

Data earlier on Friday showed the U.S. economy added the fewest workers in six months in November, cementing expectations of more stimulus that lifted the S&P 500 to a record peak. [.N]

"Beyond near-term corrections, a weaker dollar, negative real rates, concerns surrounding inflation and expectations of further fiscal stimulus amid accommodative monetary policy are likely to keep gold price risk skewed to the upside," Cooper added.

A bipartisan, $908 billion coronavirus aid bill drew support in the U.S. Congress on Thursday.

Among other metals, platinum gained 2.9% to $1,059.01 per ounce and palladium rose 1.7% to $2,341.46.

Platinum is used by automakers for catalytic-converter manufacturing to clean vehicle-exhaust fumes.

Silver was steady at $24.07 an ounce and was set to climb about 6% for the week.

(Reporting by Shreyansi Singh and Aaron Saldanha in Bengaluru; Editing by Andrea Ricci)