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Money News

Gold gains on higher U.S. jobless claims, economic recovery fears

(Reuters) - Gold recovered on Thursday from an over 3% slide in the last session, after U.S. jobless claims unexpectedly topped one million again and the Federal Reserve minutes reiterated concerns over economic recovery.

FILE PHOTO: Gold bars at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria, March 18, 2016. REUTERS/Leonhard Foeger

Spot gold rose 0.4% to $1,937.13 per ounce by 10:32 am EDT (1433 GMT). U.S. gold futures fell 1.3% to $1,944.20.

“The Fed minutes reiterated the need for people to own gold, they were still concerned about the coronavirus and its impact on the economy, that shows they want to stay accommodative and help consumers stay afloat,” said Michael Matousek, head trader at U.S. Global Investors.

Minutes from the U.S. central bank’s last policy meeting showed policymakers were concerned the economy faced a highly uncertain path and more monetary support may be needed, although they downplayed the need for yield caps and targets.

An unexpected rise in U.S. jobless claims to above 1 million last week and weaker U.S. equities was also helping gold, analysts said.

The dollar index .DXY at near one-week high, however capped gold's gains, making the non-yielding bullion expensive for holders of other currencies.

“The main fundamentals behind gold have not changed,” said Edward Meir, an analyst at ED&F Man Capital Markets.

“Stimulus is still coming in and it’s very pre-mature to say we’re recovering globally and should see higher rates and stronger dollar; we are many months away from that.”

Central banks have rolled out massive stimulus and cut interest rates to near zero to combat the economic toll from the new coronavirus crisis, prompting over 27% gains for the year in gold, considered a hedge against inflation and currency debasement.

Elsewhere, silver gained 1.2% to $27.04 per ounce, platinum dipped 2.2% to $911.40, and palladium rose 0.3% to $2,163.09.

Reporting by Sumita Layek and Eileen Soreng in Bengaluru; Editing by Alistair Bell

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