Gold slipped on Thursday as the U.S. dollar and yields firmed, but prices were still on track for a weekly rise as weak U.S. economic data spurred worries of a slowdown.
Spot gold was down 0.7% to $2,005.98 per ounce by 10:17 a.m. EDT (1417 GMT), while U.S. gold futures for June delivery fell to $2,021.70.
Pressuring prices, the dollar index came off two-month lows, while benchmark Treasury yields also ticked up for the day.
Safe-haven bullion has risen about 2% so far this week, surpassing the key $2,000 level, as oil prices surged after the shock OPEC+ output cuts, while data showed a slower U.S. services sector and fewer job openings.
The U.S. Federal Reserve is in a bind, as higher interest rates could trigger a recession but a pause in the monetary tightening risks embedding inflation, with either scenario positive for gold, said Paul Wong, market strategist at Sprott.
Gold races past $2,000/oz after weaker US data
“It is a long weekend for most major markets, so I would expect low volume, not meaningful price action today.”
Gold is seen as an inflation hedge, while lower interest rates decrease the opportunity cost of holding zero-yield bullion.
More data reinforcing the need for rate cuts “could keep gold above $2,000 and perhaps propel it into uncharted territory,” said Craig Erlam, senior market analyst at OANDA.
Traders are awaiting the U.S. jobs report on Friday for cues, but their reaction will only become apparent next week due to the Good Friday market holiday.
“With a U.S. recession still on the cards, growing systemic risk adds to gold’s case,” the World Gold Council said, adding that gold exchange-traded funds (ETFs) saw their highest monthly inflows in March since 2019.
Spot silver fell almost 1% to $24.74 per ounce, while platinum rose 0.2% to $999.42. Both metals were on track for their fourth consecutive weekly increases.
Palladium was little changed at $1,429.47.
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