Gold futures are trading higher on Thursday in reaction to lower demand for risky assets, another drop in U.S. Treasury yields and a weaker U.S. Dollar. The market has recaptured more than 62% of last week’s steep decline, indicating the buying is getting stronger.
Buyers are being driven by concerns the spread of the coronavirus and its impact on the economy is worsening, which could lead to a global recession. This is prompting gold investors to price in additional interest rate cuts by the major central banks and fiscal stimulus from their governments.
At 13:54 GMT, April Comex gold is trading $1654.90, up $12.00 or +0.74%.
The International Monetary Fund said on Wednesday the global spread had crushed hoped for stronger growth this year, while a Fed report showed there were signs the epidemic had begun to weigh on business sentiment in the United States.
Stocks Expected to Open Lower
U.S. stock futures were sharply lower Thursday morning, following a massive relief rally in the previous session, as markets remained choppy in the face of the fast-spreading coronavirus, CNBC reported.
10-year Treasury Yields Dips Below 1%
Rekindled coronavirus angst sparked fresh bids for U.S. debt on Thursday and sent the rate on the benchmark 10-year note back below 1% as Wall Street settled back into its recent risk-off attitude, CNBC reported.
The latest reading on the 10-year Treasury note yield was at 0.949%, having fallen to all-time lows around 0.9% earlier in the week.
In other news, recent data indicates the U.S. economy is on solid ground. Earlier today, the government said the number of Americans applying for first-time unemployment benefits fell last week with initial claims down by 3,000 in the week-ending February 29 to a seasonally adjusted 216,000. Economists were looking for the report to come in at 215,000.