Gold is lined up to end the week in red after benchmark US treasury surges back above 1%.
Nevertheless, the precious metal is set to record its best period in the last five weeks of trading, buoyed by prospects of a more generous stimulus.
In the commodity charts, spot gold shed off 0.6% to $1,859.10 per ounce, giving up the gains which put it in the two-week high in the previous session.
The futures contract followed suit and fell by 0.17% to $1,862.65 per ounce, settling for a contango.
For the entire week, the commodity managed to hike by 1.8% which is its best weekly performance recorded since December 18.
The downward pressure consolidation is rooted in the better than expected initial jobless claims in the United States.
It fell below the initial projection of 910,000 new claimants to 900,000 in actual figures. This in turn provided boost to US treasury yields.
Consequently, analysts noted that the European Central Bank’s decision to keep interest rates steady also worked in opposition to the bullion.
The market turned out quite disappointed with the ECB’s decision as they expected a more dovish tone from the monetary regulator.
In a projection from a senior analyst, spectators are currently kept in the dark on whether the $1.9 trillion stimulus would whether a tough road ahead.
The uncertainty turns out to be bearish from the safe haven asset which is an effective hedge against inflation being a non-yielding commodity. It will settle in the hands of the bears in the short term.
Nevertheless, experts noted that the outlook for gold will on the optimistic side in longer-term projections. This is as long the Federal Reserve maintains its record-low interest rates through 2023.
Copper Slips from Highs
It is not only the yellow metal that is experiencing a difficult time at the moment.
Copper is set to end the week with losses as the rising number of infection cases in China cloud future demand prospects.
In the latest update from the London Mercantile Exchange, three-month copper fell by 0.6% and steadied at $7,920 a tonne.
Consequently, the mostly-traded copper contract in the Shanghai Futures Exchange followed the downward trend after slashing 0.6% for the day.
The commodity closed at 58,810 yuan a tonne which is equivalent to $9,088.24.
According to an analyst, prices failed to hike as initially expected as investors shifts their focus on the growing number of Covid-19 cases in the country.