Gold boosted by safe haven flows ahead of long weekend

Gold prices ticked higher in early trading on Thursday, as investors sought to mitigate risk ahead of the US jobless claims release, an OPEC+ meeting and the long holiday weekend.

The Organization of Petroleum Exporting Countries (OPEC) and Russia will meet on Thursday via video conference. The meeting will focus on potential crude oil production cuts to support the market which is pressured from low demand due to the coronavirus. The price war between Saudi Arabia and Russia that began on March 8th has led to a collapse in oil prices, which are down over 50% year to date.

Another key market event on Thursday is the release of the Initial Jobless Claims report. The US jobless claims figure came in at a record breaking 6.6 million last week, rising from 3.3 million in the prior week. Analysts now expect that 5 million Americans filed for unemployment benefits for the week ending April 4 which would mark the third weekly figure in the millions. After last week’s release, Nobel prize winning economist Paul Krugman wrote: “Over a normal two-week period we’d expect around half a million U.S. workers to file claims for unemployment insurance. Over the past two weeks we’ve seen almost 10 million filings. We’re facing an incredible economic catastrophe.”

Data from Johns Hopkins University shows that coronavirus COVID-19 global cases have risen to 1,487,870, with 88,630 fatalities. European stocks and US stock index futures traded higher early on Thursday as glimmers of hope emerged over the re-opening of economies across the globe. CNN reported that President Donald Trump’s aides have begun to discuss a plan to reopen the US economy as early as the start of May.

Looking at the gold daily chart we can see that price is nearing the recent high of $1,674 from Tuesday. A breach above this price would bring into focus the high of $1,703 from March 9th, which marks the highest level since December 2012.