Gold Settles Notably Lower As Lockdown Restrictions Ease

Gold prices fell on Wednesday, extending recent slide, as the dollar firmed up amid easing of lockdown measures by some U.S. states.

The dollar index rose to 100.20 by mid-morning, and despite easing to 100.07, was still holding in positive territory, netting a gain of nearly 0.4%.

Gold futures for June ended down $22.10, or about 1.3%, at $1,688.50 an ounce.

On Tuesday, gold futures for June settled lower by about 0.2%.

U.S. President Donald Trump said the coronavirus task force would be shut down in the coming weeks and replaced with an unspecified new advisory body that would focus on restarting the economy.

Trump said he wants the U.S. economy to reopen but acknowledged some people will be “badly affected” as curbs are eased.

Underscoring the deepening economic impact of Covid-19, a report showed on Tuesday that the U.S. service sector shrank for the first time in a decade last month.

Atlanta’s Fed president Raphael Bostic said the pace and shape of the U.S. economic recovery when the novel coronavirus outbreak abates is still highly uncertain and will vary across the country.

Separately, Chicago Federal Reserve President Charles Evans warned that the decision to reopen the economy has high risks and policymakers will have a better idea of the outlook by the summer.

Meanwhile, a report from payroll process ADP showed private sector employment nosedived in the month of April, plunging by 20.236 million jobs, after slumping by a revised 149,000 jobs in May.

Economists had expected employment to tumble by 20.050 million jobs compared to the loss of 27,000 jobs originally reported for the previous month.

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