Bullion posts weekly decline as Europe prepares to ease coronavirus lockdowns

London (May 3)  Gold fell this past week as European nations offered cautious signals that they had passed through the peak of the COVID-19 pandemic and as US cases rose at the slowest pace this month. Base metals declined.

British Prime Minister Boris Johnson said the country was through the worst of the outbreak and pledged to deliver plans to lift the lockdown, while Italy, France and Germany all also outlined proposals to gradually ease restrictions.

The European Central Bank stepped up its response to the coronavirus crisis by cutting funding costs for banks, but refrained from boosting its bond-buying program.

While stimulus efforts around the world have helped calm investors’ nerves and fueled gains in equity markets, industrial metals were under pressure on Friday after fresh evidence of the toll the virus is taking on major economies.

Data showed South Korean exports tumbled the most in a decade and Japanese manufacturing weakened.
 
“The divergence in financial and fundamental activity data is striking,” Pernille Henneberg, an economist covering global macroeconomics at Citigroup Inc, said in an a note. “More effective policy action is needed for a meaningful economic recovery that would align financials and fundamentals.”

Asian and European trading was limited on Friday, with many nations on holiday for the International Workers’ Day.

Spot gold declined to US$1,696 in London, after dropping 1.6 percent on Thursday. The metal is down 1.7 percent this week.

In other precious metals, platinum on Friday fell as much as 2.5 percent, while silver and palladium also retreated.

Industrial metals:

Copper dropped 1.7 percent and nickel slipped 2.5 percent, extending declines in the wake of data showing deepening job losses in the US.

Overseas shipments from South Korea last month fell 24 percent from a year earlier, led by declines in exports of ship, autos and auto parts, semiconductors and oil products.

Metals fell as a “raft of Asian data pointed to troubles ahead,” including the export figures, and falling industrial production in Japan, Marex Spectron’s Anna Stablum said in an e-mailed note.

Metals could also be pressured after US President Donald Trump revived his attack on China, speculating it could have spread the coronavirus and threatening trade tariffs.

TaipeiTimes