Gold futures retreated Friday, with investors shunning haven assets amid early optimism over a drug that’s anecdotally shown potential to treat COVID-19 and the release of a road map to gradually reopening the U.S. economy.
“Risk sentiment has been bolstered by U.S. President Donald Trump and reports suggesting a potential coronavirus treatment” from U.S. drug company Gilead Sciences Inc., said Lukman Otunuga, senior research analyst at FXTM. “Market hopes around plans to ease lockdown measures are set to rise, especially after Trump set guidelines that allow social distancing rules to be lifted as soon as four weeks.”
“While gold may sink lower on the good news, the downside will most likely be limited as disappointing economic data across the world drags investors back to reality,” Otunuga told MarketWatch.
Gold for June delivery US:GC00 on Comex fell $ 24.10, or 1.4%, to $ 1,707.60 an ounce, with prices trading around 2.6% lower for the week. It trades nearly 7% higher for the month. May silver US:SIK20 was off 24.7 cents, or 1.6%, at $ 15.375 an ounce, poised for a weekly loss of more than 4%.
For gold, “sustained weakness below $ 1,700 could open a path back towards $ 1,675 in the near term,” said Otunuga.
Weakness for gold comes as U.S. benchmark stock indexes moved higher in Friday dealings, following a news report late Thursday that early evidence from a clinical trial showed a drug being developed by Gilead US:GILD showed promise in treating COVID-19. Risky assets were also boosted after Trump released a plan outlining a reopening of the U.S. economy.
Need to Know:Why an analyst bullish on Gilead says antiviral drug ‘won’t solve’ COVID-19
Elsewhere on Comex Friday, May copper US:HGK20 tacked on 2.1% to $ 2.338 a pound, with prices looking at a weekly rise of 3.5%. July platinum US:PLN20 fell by 0.2% to $ 792 an ounce, paring its weekly rise to around 5.8%, while June palladium US:PAM20 edged up by 0.07% to $ 2,122.20 an ounce, poised for a weekly rise of 0.6%.
