Gold futures contracts inched higher during the morning Asian trade session on Thursday. Traders were digesting overnight commentary by Federal Reserve Chair Jerome Powell who was downbeat with his economic assessment.
Powell’s commentary about a “significantly worse” recession, from the Covid-19 lockdown, boosted the appeal of safe haven asset classes at the expense of equities and sentiment linked currencies.
This commentary boosted the demand for the yellow metal as are talks about possible additional fiscal stimulus from the U.S. Congress. Traders are now waiting on weekly unemployment claims data out of the United States.
The widely traded spot gold futures contract, as of 12:38 am GMT, was trading higher. The spot contract added 0.1 percent to trade at to $1,716.66 per ounce
The U.S. gold futures contract, for front end delivery, was also trading higher. This contract added 0.6 percent to trade at $1,726.20 per ounce.
Gold Traders digest remarks from the U.S. Fed Chair
Overnight, U.S. Federal Reserve Chairman Jerome Powell said that more must be done to support the economy during a webcast in front of the Peterson Institute for International Economics.
Powell during his speech dissuaded hopes for a negative interest rate policy. He said that this was “off-base.” He did call on the Congress to do more.
“While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks,” Powell said.
Traders Hope for additional U.S. Fiscal Stimulus
State governors, from both the Democratic and Republican Parties, are calling on Congress to set aside any partisanship divide and provide additional stimulus to help insulate against the devastating economic blow from the coronavirus.
The governors said that U.S. cities and states need relief of face economic ruin as they fight against what they call the “red, white and blue pandemic.”