Gold rebounded after initial declines on Thursday, bolstered by safe haven demand as weak retail sales and manufacturing data out of the United States heightened fears of a deep global recession due to the coronavirus.
Spot gold rose 0.4% to $1,722.02 per ounce by 0704 GMT, erasing losses driven by profit-booking and a stronger dollar earlier in the session. U.S. gold futures rose 0.9% to $1,755.50.
The overall upward trend for gold has not changed, said Avtar Sandu, senior commodities manager at Phillip Futures.
"If you look at the bigger picture, (economic) data is bad, which means you get another few more rounds of quantitative easing, and central banks would definitely keep interest rates low in this weak environment," he said. U.S. retail sales suffered a record drop in March and output at factories declined by the most since 1946, raising concerns that the economy contracted in the first quarter at its sharpest pace in decades as measures to control the spread of the virus weighed.
Japanese business confidence plunged to fresh decade lows in April, while British retail spending slumped by more than a quarter during the first two weeks of lockdown measures.
Governments and central banks around the world have unleashed unprecedented fiscal and monetary stimulus and other support for economies floored by the pandemic. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Gold also tends to benefit from widespread stimulus from central banks, as it is seen as a hedge against inflation and currency debasement.
"While gold will continue to be in demand, sometimes investors need funds to cover their margin calls, so losses in other financial assets might lead to falls in the gold price," said John Sharma, economist at National Australia Bank.
World stock markets fell, while the dollar extended gains after a plunge in U.S. retail sales and factory production and increasing gloomy economic outlooks for Asia.
However, Jeffrey Halley, senior market analyst at OANDA, said in a note that he was now unsure whether gold was still correlating to stock markets or running its usual inverted correlation to the U.S. Dollar.
"This evening's U.S. Initial Jobs data may give us more of a clue to that quandary, with weak data almost certainly sending Wall Street lower.
"While gold usually gains from reduced risk appetite, the metal has, on occasion, moved in tandem with stock markets recently, with sharp selloffs in wider markets prompting investors to sell precious metals to cover their losses elsewhere. The U.S. jobs data is due at 1230 GMT.
Palladium gained 1.7% to $2,216.56 an ounce, while silver rose 0.2% to $15.51 per ounce and platinum was up 1% to $787.27.