Gold futures were attempting to regain some traction higher on Wednesday to start the new month and quarter, amid expectations of increasingly poor economic data due to the COVID-19 pandemic which has helped to partly support gold buying or at least limited downside for the precious metal.
“Gold prices are rising as investors brace for a steady flow of ugly data that will get much worse and probably for a lot longer than what was initially expected,” wrote Edward Moya, senior market analyst at Oanda, in a Wednesday research note.
Earlier Wednesday, a report on private-sector employment from Automatic Data Processing Inc. ADP, -0.83% helped give gold prices a modest push higher. The report found that 27,000 jobs were lost in the month, smaller than forecasts from economists surveyed by Econoday who expected a decline of 180,000, but likely a harbinger of what is to come after jobless claims last week produced a record 3.28 million claims for the period.
June gold GCM20, +0.18% on Comex rose $1.50, or less than 0.1%, at $1,598.10 an ounce, after falling 2.8% on Tuesday. Based on the most-active contracts, gold futures rose 1.9% in March and gained 4.8% for the quarter, according to Dow Jones Market Data.
Moves for gold came as global stocks were under renewed pressure amid growing concerns about the economic implications for the epidemic which are hard to fathom for investors. On Tuesday, President Donald Trump warned that a “very, very painful” two weeks lies ahead as the COVID-19 pandemic continues. The White House released new projections for 100,000 to 240,000 deaths in the U.S. from the coronavirus pandemic even if current social-distancing guidelines are maintained.
Meanwhile, the number of COVID-19 cases world-wide have risen to 862,234 on Wednesday, while the number of deaths have climbed to 42,404, according to data from Johns Hopkins University.
“Gold prices should rise as the virus spread is intensifying alongside lockdown efforts to mitigate it,” Moya wrote. He said that gains for bullion are likely supported by fears the measures being implemented to prevent the spread of the deadly infection will result in a global recession, a boon for gold buyers.
May silver SIK20, -0.32%, meanwhile, traded 8 cents, or 0.1%, lower at $14.070 an ounce to start the new month and quarter. Based on the most-active contracts, silver lost about 14% for the month and saw a quarterly decline of 21%.