Gold futures were trading modestly higher Thursday, supported by a subdued U.S. dollar, weakness in equities and a slight retreat in yields ahead of data and a monetary policy update, which could prove catalytic for bullion.
December gold traded $5.30, or 0.3%, higher at $1,798.80 an ounce, following a 0.3% decline on Wednesday. The yellow metal scored a slight haven bid on Wednesday after the release of the Federal Reserve’s Beige Book indicated that economic growth was slowing amid the spread of the delta variant of COVID-19.
Investors are awaiting weekly data on jobless benefits insurance due at 8:30 a.m. Eastern Time, as well as an updated policy statement and news conference from the European Central Bank, at 7:45 a.m. ET and 8:30 a.m., respectively, which could prove market moving.
Employment data has become a key measure of investors bets on the pace of the U.S.’s recovery from the COVID pandemic, with the Fed set the stage for the eventual reduction of accommodative measures that were put in place to provide much-needed to liquidity to financial markets that the height of the distress caused by the deadly pathogen. However, those measures are viewed by a number of Fed officials as no longer needed.
Meanwhile, investors will also look to see if the ECB will provide indications that it is ready to pare back its stimulus programs, which could influence bond yields and other assets including stocks and precious metals.
Bets currently are that Europe’s policy makers led by Christine Lagarde will point to plans to the start the ECB’s asset-tapering initiative.
Against that backdrop, the Dow Jones Industrial Average, the S&P 500 index looked to start trade on Thursday on the backfoot, while yields were also lower, as investors sough to hedge their best with safe-havens. The yield on the 10-year Treasury note was at around 1.33%, lower than its peak this week at 1.37%, which had marked a two-month high.