(Adds comments, details and updates prices)
* U.S. Senate overwhelmingly backs $2 trln bill
* Initial U.S. jobless claims data due at 1230 GMT
* Palladium eases after Wednesday’s 20% surge
By Shreyansi Singh
March 26 (Reuters) – Gold prices fell on Thursday as
expectations of a surge in U.S. jobless claims due to the
coronavirus outbreak eclipsed a massive U.S. stimulus package
and kept alive a rush for cash among investors.
Spot gold was down 0.7% to $1,602.06 per ounce by
0751 GMT, after falling 1% earlier in the session.
“There is no positive growth story here until business
reopens, and that might see all these assets, that have been
benefiting from the U.S. Federal Reserve’s (recent) stimulus
announcement, including gold, come back down,” said DailyFx
currency strategist Ilya Spivak.
The U.S. Senate on Wednesday overwhelmingly backed a $2
trillion bill aimed at helping unemployed workers and industries
hurt by the coronavirus.
This came after the Fed said on Monday it would buy bonds in
unlimited numbers and backstop direct loans to companies.
Asian stock markets nudged up, but gains were capped as
investors were torn between relief at the package and concern as
to whether it will be enough to weather the coming storm.
Data showing initial jobless claims in the United States is
due at 1230 GMT, with forecasts ranging from 250,000 claims all
the way up to 4 million.
“There’s panic among traders and investors and they don’t
trust even gold,” said Hareesh V, head of commodity research at
Geojit Financial Services.
Gold market participants, meanwhile, are concerned about a
supply squeeze in the market, following a sharp divergence in
London and New York prices as the coronavirus closed precious
U.S. exchange operator CME Group on Tuesday
announced a new gold futures contract to combat price volatility
caused by the shutdown of gold supply routes, but traders and
bankers said it would not immediately calm markets.
U.S. gold futures fell 0.8% to $1,620.00 per ounce,
retreating from a rally to $1,699.30 an ounce on Wednesday, but
were above the London spot contract.
Among other precious metals, palladium eased 2.2% to
$2,265.50 per ounce, having registered its best daily gain since
1997 in the last session as a lockdown in major producer South
Africa exacerbated supply woes.
“Palladium prices will normalise in some time, it’s merely
speculation as of now. The automobile industry might face the
worst hit due to global demand slowdown,” said Jigar Trivedi,
commodities analyst at Anand Rathi Shares and Stock Brokers in
Platinum slipped 2.3% to $721.18 an ounce, while
silver was down 1% to $14.29.
(Reporting by Shreyansi Singh and K. Sathya Narayanan in
Bengaluru; Editing by Aditya Soni and Subhranshu Sahu)