Gold set for weekly gain amid doubts about U.S. economy

Gold prices surged, extending gains from the prior session and were on track for a weekly gain after downbeat U.S. jobless claims data reinforced fears of a slower recovery from the coronavirus-induced economic crisis. However, a rebound in the Asian equities limited the metal's advance.

Spot gold was trading 0.05 percent higher at $1,947.10 per ounce by 0643 GMT, having hit a low of $1924.77 on Wednesday, its lowest since August 13. Gold is up 0.1 percent so far this week, having shed 4 percent in the week to Aug. 14, its worst in five months. U.S. gold futures rose 0.3 percent to $1,951.60.

Asian shares bounced back, supported by a technology stocks-fuelled rally on Wall Street.

Data released on Thursday showed the number of Americans filing a new claim for unemployment benefits rose unexpectedly back above the 1 million mark last week, indicating U.S. job market struggles to recover from the effects of the coronavirus pandemic. Initial claims for state unemployment benefits rose to a seasonally adjusted 1.106 million for the week ended Aug. 15, from an upwardly revised 971,000 in the prior week.

Separate data showed, the Philadelphia Fed’s business index slid to a reading of 17.2 from 24.1 in July, while the Conference Board’s Leading Economic Index rose 1.4 percent in July, following increases of 3.0 percent and 3.1 percent in June and May, respectively.

According to a Reuters tally, more than 22.56 million people have been reported to be infected by the novel coronavirus globally and 787,814​ have died. 

Adding to doubts over the U.S. economic rebound, the minutes of the Federal Reserve's July 28-29 meeting, published on Wednesday, showed policymakers concerned that an economic recovery faced a highly uncertain path. Moreover, U.S. Republicans and Democrats are still struggling to agree over additional economic stimulus.

Meanwhile, the Trump administration declined to acknowledge any plans to meet with China over the Phase 1 trade deal after the commerce ministry in Beijing said bilateral talks would be held in the coming days.

The greenback against a basket of currencies traded 0.1 percent down at 92.63, having touched a high of 99.05 on Wednesday, its highest since Oct. 10 and was on course for its ninth consecutive weekly decline. The U.S. Treasury yields steadied, with the benchmark 10-year note yield trading at 0.654 percent.

Investors now await the United States purchasing managers’ index surveys for the next broad gauge of the recovery’s progress.