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PRECIOUS-Gold gains on higher U.S. jobless claims, economic recovery fears

Published 21/08/2020, 12:55 am
© Reuters.
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* Fundamentals behind gold have not changed -analyst

* Dollar eases from near one-week high

* Gold shed more than 3% on Wednesday

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By Sumita Layek

Aug 20 (Reuters) - Gold recovered on Thursday from a side of more than 3% in the last session, after U.S. jobless claims unexpectedly topped one million again and the Federal Reserve minutes reiterated concerns over economic recovery.

Spot gold XAU= rose 0.6% to $1,940.14 per ounce by 1:42 p.m. EDT (1742 GMT). U.S. gold futures GCv1 settled down 1.2% to $1,946.50.

"The Fed minutes reiterated the need for people to own gold, they were still concerned about the coronavirus and its impact on the economy - that shows they want to stay accommodative and help consumers stay afloat," said Michael Matousek, head trader at U.S. Global Investors.

Minutes from the U.S. central bank's last policy meeting showed policymakers were concerned the economy faced a highly uncertain path and more monetary support may be needed, although they downplayed the need for yield caps and targets. unexpected rise in U.S. jobless claims to back above 1 million last week was also helping gold, analysts said. The U.S. economy has regained only 9.3 million of the 22 million jobs lost between February and April. dollar index .DXY eased from a near one-week high, making the non-yielding metal cheaper for holders of other currencies.

"The main fundamentals behind gold have not changed," said Edward Meir, an analyst at ED&F Man Capital Markets. "Stimulus is still coming in and it's very pre-mature to say we're recovering globally and should see higher rates and stronger dollar; we are many months away from that."

Central banks have rolled out massive stimulus and cut interest rates to near zero to combat the economic toll from the coronavirus pandemic, prompting 28% gains for the year in gold, considered a hedge against inflation and currency debasement. silver XAG= gained 1.3% to $27.07 per ounce, platinum XPT= dipped 2.2% to $911.22 an ounce, and palladium XPD= rose 0.7% to $2,172.54 an ounce.

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