Gold slips on hopes of recovery, vaccine; focus on U.S. payrollsGold slips on hopes of recovery, vaccine; focus on U.S. payrolls
FILE PHOTO: Gold bars and coins are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich

By Brijesh Patel

(Reuters) – Gold edged lower on Thursday, easing from a near eight-year peak hit in the last session, as solid U.S. manufacturing data and promising results from a COVID-19 vaccine trial revived hopes for a quick economic recovery, denting demand for safe havens.

Spot gold was down 0.1% to $1,768.56 per ounce by 0703 GMT, after touching $1,788.96 on Wednesday, its highest since October 2012.

U.S. gold futures fell 0.1% to $1,778.

“A general pro-growth stance across markets is why we’re seeing a little bit of pressure on gold,” said Michael McCarthy, chief strategist at CMC Markets, adding that market action reflected a tussle between concerns over rising cases and hopes for a vaccine and positive U.S. data.

Manufacturing activity in the United States rebounded in June, hitting its highest in more than a year, while similar surveys from China, Germany and France all pointed to a recovery in factory activity.

The economic readings and optimism over a potential vaccine lifted equities.

However, “The bull case for gold is still intact with real rates low and suppressed and which would be able to sustain the high price of gold,” Phillip Futures said in a note.

Markets now await June U.S. employment data and weekly initial jobless claims report for clues about the health of the U.S. economy as new cases accelerate in several southern states.

Economists polled by Reuters expect U.S. nonfarm payrolls likely increased by 3 million jobs in June, which would be the most since the government started keeping records in 1939.

Offering some respite to gold, the dollar index fell 0.1% against its rivals.

While major market moves are unlikely ahead of the U.S. data, “any deterioration on the ground in Hong Kong could see further support for safe-haven gold,” CMC’s McCarthy said.

Elsewhere, palladium gained 0.5% to $1,914.13 per ounce, platinum rose 0.1% to $816.58, while silver fell 0.4% to $17.87.

(Reporting by Brijesh Patel in Bengaluru; Editing by Shailesh Kuber and Uttaresh.V)