Gold slips as US jobless claims fall, China claims outbreak contained

Gold eased on Thursday after data showed lower jobless claims in the United States and on reports Beijing was bringing its latest coronavirus outbreak under control, but mounting infections globally limited losses for the safe-haven metal.

Spot gold fell 0.2% to $1,723.23 per ounce by 12:30 p.m. ET (1630 GMT). US gold futures shed 0.3% at $1,730.10.

"Gold is giving up earlier gains due to some positive reports from Beijing that they have contained the outbreak," said Edward Moya, senior market analyst at broker OANDA.

"The jobless claims data is getting better. The economic situation might be getting better at last."

Initial claims for state unemployment benefits in the United States dropped for the 11th straight week, pushing claims further away from a record 6.867 million in late March.

However, the pace of US labor market recovery appeared to have stalled.

In China, fears over a 'second wave' of the pandemic eased somewhat, as a medical expert said Beijing has brought its latest outbreak under control.

Still, mounting infections worldwide continued to inspire safe-haven buying of gold, driving the precious metal close to a one-week high early in the session. Safe-haven appeal also limited gold's decline despite competition from other safe havens such as the US dollar.

"Ongoing risks to the global economic recovery, especially with regards to recent spikes in virus cases in both the U.S. and China continue to underpin (gold's) price action. However, a lack of physical demand is likely to see gold hold $1,700-$1,750 over the near term," MKS PAMP said in a note.

Elsewhere, palladium fell 1.2% to $1,899.21 per ounce, while platinum slid 2.1%, to $801.37.

Silver was down 1.2% to $17.37.