Gold futures on Thursday looked likely to extend a record rally to a fifth straight day, with a muted U.S. dollar and lackluster moves in equities supporting bullion’s ascent to near $2,100.
“Gold price continues to skyrocket as demand for the precious metal surges,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades, in a daily note.
Appetite for precious metals, including silver, as been resurgent, with both gold and silver futures and securities pegged to the commodities on a tear in recent weeks.
Signs of weakness in U.S. employment in Thursday’s weekly jobless claims may deliver a fresh jolt to precious metals whose gains have been underpinned by uncertainty about the global economy in the wake of the COVID-19 pandemic. Central banks and governments have unfurled unprecedented stimulus measures to lessen the economic harm from the viral outbreak—an environment that has thus far proven ideal for both gold and sliver to draw bids for investors seeking the perceived safety of those assets.
A weekly report on those seeking unemployment benefits in the U.S. is expected to show that another 1.442 million have filed new claims for state unemployment benefits during the week ended August 1, according to consensus estimates from economists polled by Econoday. That would be up from the 1.434 million in the prior week.
Meanwhile, the Bank of England on Thursday said that it would take longer for the U.K. economy to recover its precrisis levels than had initially been predicted, warning it may now be the end of 2021 rather than the second half of next year.
Against the backdrop, December gold rose $22, or 1.1%, at $2,071.30 an ounce, a after a 1.4% gain for bullion and putting the most-active contract on pace for its fifth straight record settlement.
“While demand from the jewelry sector is muted by the Covid crisis, we are witnessing an euphoric phase, where investors are not considering technical indicators or fundamentals as they are simply focused on increasing their positions on gold,” De Casa wrote. “The prevailing uncertainty along with growing expectations for further dovish actions by central banks is likely to fuel this phase,” he wrote.
Meanwhile, VanEck, the firm that was one of the first to roll out gold-backed funds, is calling for gold to touch $3,400 an ounce.
September silver, meanwhile, rose $1.38, or 5.1%, to reach $28.265 an ounce, following a 3.3% rally on Wednesday, which put gold’s sister metal at its highest finish since September of 2013, according to Dow Jones Market Data.
Gains for silver and gold come as the dollar was trading flat. The ICE U.S. Dollar Index was less than 0.1% higher at 92.888, against a basket of a half-dozen currencies. Stock markets also were under pressure after tallying a strong finish on Wednesday.