GOLD headed for its largest weekly decline in seven weeks as European nations, including the UK, offered cautious signals that they've passed through the peak of the novel coronavirus outbreak and as US cases rose at the slowest pace this month.
UK Prime Minister Boris Johnson said the country was through the worst of the virus and pledged to deliver plans to lift the lockdown, while Italy, France and Germany all also outlined proposals to gradually ease restrictions.
The European Central Bank stepped up its response to the novel coronavirus crisis by cutting funding costs for banks, but refrained from boosting its bond-buying programme.
"Demand for safe haven assets took a further dive" after Mr Johnson's virus comments on Thursday in the UK, Australia & New Zealand Banking Group Ltd economist Kishti Sen said on Friday in a note. Asian trading was limited on Friday, with much of the region out on holidays.
Spot gold was steady at US$1,687.29 an ounce as at 12.07 pm on Friday in Sydney, after falling 1.6 per cent on Thursday.
The metal was headed for its biggest weekly decline since March 13.
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In other precious metals, silver rose 0.2 per cent, while platinum and palladium were both lower. Industrial metals declined for a second day after gloomy economic data, including deepening job losses in the US, and plunging US personal spending data.
Initial jobless claims in the US totalled 3.84 million in the week ended April 25, sending the six-week total above 30 million.
Copper on the London Metal Exchange slipped as much as 1.6 per cent to US$5,105 a tonne after a 1.4 per cent decline on Thursday. Aluminium in London was 0.6 per cent lower. There's concern over the impact for base metals from weaker overseas demand for China's exports, while aluminium also is contending with rising stockpiles and sluggish demand, ANZ's Mr Sen said.
Earlier on Thursday, gold futures were down for a fifth straight session after European Central Bank (ECB) moves to stem the impact of the novel coronavirus weren't as aggressive as some traders had anticipated. The metal still posted its best month since August.
The ECB didn't announce an increase to its pandemic emergency purchase programme, disappointing some bond investors even as central bank head Christine Lagarde said the institution was ready to do whatever was needed for as long as needed.
"The market was somewhat disappointed by today's ECB policy signals, which weren't aggressive enough when measured against further signs of economic deterioration," Bart Melek, a TD Securities analyst, said in an e-mailed message.
Gold futures for June delivery fell 1.1 per cent to settle at US$1,694.20 an ounce at 1.30 pm on the Comex in New York, after rising as much as 1.4 per cent. The metal rose 6.1 per cent in April.
Bullion has risen this month as many economies pumped in stimulus to repair the damage from the novel coronavirus pandemic, boosting the metal's allure as a store of value.
Overall sentiment for gold is still high as investors seek havens amid the economic downturn and as monetary and fiscal stimulus increase, according to State Street Global Advisors.
US data on Thursday showed that personal spending fell in March by the most on record as shutdowns and job losses wreaked havoc on the economy.
A separate report showed the nation's jobless-claims figures were larger than expected, sending the six-week total above 30 million. The data sent US stocks falling from a seven-week high.
On Wednesday, Federal Reserve chairman Jerome Powell said the novel coronavirus crisis could leave permanent scars on the US economy. The central bank said in a statement that it "will use its tools and act as appropriate to support the economy". Gold will trade between US$1,700 and US$1,800 an ounce for the next few weeks, with a skew to the higher end of that range, Robin Tsui, an Asia-Pacific gold strategist, said in an interview. "The low interest-rate factor is going to drive gold prices forward." BLOOMBERG
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