Gold has posted considerable gains in the Thursday session. In North American trade, the spot price for one ounce of gold is $1242.03, up 0.44% on the day. In economic news, ADP nonfarm payrolls plunged to 179 thousand, well off the estimate of 196 thousand. This was the lowest level since May. Unemployment claims edged lower to 231 thousand, but this was higher than the estimate of 226 thousand. There was better news from the services sector, as ISM Non-Manufacturing PMI improved to 60.7, easily beating the estimate of 59.1 points. On Friday, the U.S. releases wage growth and nonfarm payrolls.
A sharp downturn in global equity markets has been good news for gold prices, as investors have flocked to safe-haven assets like gold. The base metal has climbed 1.60% this week. Earlier on Thursday, gold broke above $1240 for the first time since the first week in July. In addition to disappointing job numbers out of the U.S., an inverted curve in U.S Treasuries has raised risk apprehension on Thursday, since it is often a sign that a recession is on the way.
Investor risk appetite jumped early in the week, after the announcement that President Trump had agreed to put a hold on any further tariffs against China. However, the optimism didn’t last long, as investors have questioned whether the 90-day reprieve will lead to an improvement in the deteriorating trade relations between the U.S and China. Unless the sides make significant progress, safe-haven gold could remain in demand for jittery investors.
