Price of Gold Fundamental Daily Forecast – Aggressive Stimulus Measures Underpinning Prices
Gold futures are trading higher at the mid-session after another surge in the number of U.S. jobless claims raised expectations for another stimulus plan.
The number of Americans filing claims for unemployment benefits doubled from last week to a record high of 6.65 million, as more jurisdictions enforced stay-at-home measures to curb the coronavirus. That brings to 10 million the total Americans who filed over the past two weeks, according to Labor Department data.
At 16:27 GMT, June Comex gold is trading $1634.80, up $43.40 or +2.73%.
Economists surveyed by Dow Jones had expected 3.1 million for last week, one week after 3.3 million filings in the first wave of what has been a record-shattering swelling of the jobless ranks. The previous week’s total was revised higher by 24,000.
On an unadjusted basis, the total was 5.8 million, a number that some economists consider more relevant because seasonal adjustments are less relevant due to the unusual impact the coronavirus induced shutdown has had on the economy.
“Sadly, this probably still under estimates the actual numbers because of the overload in the systems and not every call getting enough,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “Even if we’re accurately calculating numbers, we still likely have worse to come.”
Traders also said the sudden shutdown from social distancing policies cause a cascade of joblessness unlike anything the nation has ever seen.
“Not only was the number worse than expected, but with lockdowns becoming stricter and being extended, we should anticipate further surges in jobless claims over the coming weeks,” said Seema Shah, chief strategist at Principal Global Investors.
Short-Term Outlook
The longer the coronavirus pandemic, the more economic conditions will deteriorate. Gold is likely to continue to benefit from the crisis, having been recently underpinned by aggressive monetary stimulus from the U.S. Federal Reserve and fiscal stimulus from the United States government.
This article was originally posted on FX Empire
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