Gold dips on profit-taking, but eyes weekly gain on economic woesGold dips on profit-taking, but eyes weekly gain on economic woes
FILE PHOTO: A salesman displays gold bars inside jewellery shop on the occasion of Akshaya Tritiya festival in Hyderabad

By Shreyansi Singh

(Reuters) – Gold eased on Friday as investors booked profits after a 1% rise in the previous session, but weak economic data from the United States and Europe due to the novel coronavirus kept bullion on track for a weekly gain.

Spot gold slipped 0.6% to $1,721.15 per ounce by 0345 GMT, but was up about 2.2% for the week so far.

Prices hit a more than one-week high of $1,738.58 on Thursday, bolstered by hopes of more stimulus from the United States, especially after jobless claims soared to a record 26 million in the past five weeks.

U.S. gold futures were little changed at $1,744.70 per ounce.

“We’ve seen a little bit of a pullback on gold just because it was such a big rally last night,” IG Markets analyst Kyle Rodda said.

Asian shares and U.S. stock futures fell, spurred by doubts about progress in the development of drugs to treat COVID-19 and new evidence of U.S. economic damage caused by the pandemic.

The dollar held close to a more than two-week high touched on Thursday, limiting appetite for gold.

The U.S. House of Representatives overwhelmingly approved a $484 billion coronavirus relief bill on Thursday, funding small businesses and hospitals and pushing the total spending response to the crisis to an unprecedented near $3 trillion.

European Union leaders agreed to build a trillion euro emergency fund to help recover from the pandemic.

While profit-taking weighed on gold, “the continuation of global central bank stimulus will be supportive for bullion as real rates remain negative,” Stephen Innes, head of trading and market strategy at SPI Asset Management, said in a note.

Gold, considered a safe store of value during economic or political uncertainties, tends to benefit from widespread stimulus measures from central banks since it’s seen as a hedge against inflation and currency debasement.

The outbreak, with more than 2.64 million reported cases globally, has pushed governments and central banks around the world to unleash unprecedented fiscal and monetary support for economies.

Economic activity in the euro zone all but ground to a halt this month as the coronavirus sweeping across the world forced governments to impose lockdowns and firms to down tools and shut their businesses, a survey showed.

Among other precious metals, palladium rose 1.1% to $2,000.35 an ounce, but was on track to post its fourth straight weekly decline.

Platinum rose 1.3% to $764.81 per ounce, while silver fell 1.0% to $15.15 per ounce.

(Reporting by Shreyansi Singh in Bengaluru; Editing by Subhranshu Sahu)