Fundamental Comment

Gold set for weekly gain amid economic concerns

Gold set for weekly gain amid economic concerns

Gold prices were steady during Friday’s trading, but set for a weekly gain amidst economic concerns after the release of downbeat data showing that major economies are heading into a severe global recession.

As of 09:30 GMT, spot gold hovered around $1,728.30 an ounce, where the precious metal touched its lowest level during the session at $1,721.01, but it's up more than 2.3 percent since the beginning of the week.

The precious metal reached its highest level in more than a week during Thursday’s trading when it touched $1738.75 level after the release of dismal PMI figures, and as a result of the stimulus package launched by the Senate.

In the United States, economic activity contracted during the initial reading this month to the lowest level in history with a record decline in the services sector.

US unemployment benefit applications increased strongly by 4.5 million last week, albeit at a slower pace, and sales of new US homes fell by nearly 15 percent over the past month.

On the other hand, the US Senate had approved a new stimulus package to support small US companies, Covid-19 tests and exhausted hospitals.

On Tuesday, the Senate voted on a $484 billion package, where Senate Minority Leader Chuck Schumer confirmed the agreement with the White House on the stimulus deal earlier in the day.

The dollar settled near the highest level in more than two weeks on Thursday, to slightly curb some demand for gold.

Meanwhile, the dollar index, which trails the performance of the green currency against six major currencies, surged 0.37 percent to trade at 100.89, while the highest level recorded was at 100.97, the highest since April 7.

As for other precious metals, silver descended by 0.02 percent to $15.35 an ounce, while the lowest level recorded during the session was at $15.26.

Palladium edged down 1.97 percent to trade at $1,961.50 an ounce, while platinum went in the same direction by falling 0.29 percent at $785.45.

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