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Gold flirts with record peak on bleak economic outlook

Credit: REUTERS/AHMED YOSRI

Gold extended its rally on Thursday to within touch of the previous day's record peak, as the COVID-19 pandemic clouded the economic outlook and boosted bullion's safe-haven allure, though the rapid pace of gains could prompt some profit-taking.

* Gold up 35% so far this year

* Silver hits over 7-year peak at $27.85/oz

* U.S. weekly jobless claims due at 1230 GMT

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

By Eileen Soreng

Aug 6 (Reuters) - Gold extended its rally on Thursday to within touch of the previous day's record peak, as the COVID-19 pandemic clouded the economic outlook and boosted bullion's safe-haven allure, though the rapid pace of gains could prompt some profit-taking.

Spot gold was up 0.5% at $2,050.27 per ounce by 0928 GMT, after hitting an all-time high of $2,055.10 on Wednesday. U.S. gold futures rose 0.7% to $2,063.50.

"The upward momentum in gold and silver is still fairly solid at this stage because there's a lack of interest in other asset classes; many factors of the economy are still struggling," Bank of China International analyst Xiao Fu said.

Gold's gains also came despite a slight uptick in the U.S. dollar, which also benefited from receding risk sentiment as investors awaited U.S. jobs data for confirmation on the state of the world's largest economy even as Washington remained deadlocked over a large relief package. [USD/][MKTS/GLOB]

The U.S. jobless claims are due at 1230 GMT, while payrolls figures will be released on Friday.

Gold has rallied about 35% this year as it's considered an asset that should hold its value while the pandemic and money printing by central banks erode the value of others.

While the outlook for gold remains fundamentally positive, a correction is also increasingly likely, analysts said.

"The problem is that sometimes a story is so strong that a market rallies too quick for fundamentals to justify, and when price momentum begins to slow, those who got in too late give up and sell out early. That can inspire a pretty rapid technical correction," IG Markets analyst Kyle Rodda said.

Silver , meanwhile, gained 2.8% to $27.78 per ounce having hit its highest since April 2013 at $27.85.

Platinum rose 0.9% to $975.80 and palladium was up 1% at $2,203.25.

https://tmsnrt.rs/3fzIv4e

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Eileen Soreng in Bengaluru; editing by Emelia Sithole-Matarise) ((eileen.soreng@thomsonreuters.com; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 6131; Reuters Messaging: eileen.soreng.thomsonreuters.com@reuters.net)) Keywords: GLOBAL PRECIOUS/ (UPDATE 3)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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