By Barani Krishnan 

Investing.com – Nearly 40 million U.S. jobs lost to the coronavirus pandemic suggests that gold prices should be up. 

But data on Thursday also showed a flattening of the curve in job losses, suggesting to some that the unemployment situation, while still bad, might also be improving. 

That, along with a rebound in the , pushed the yellow metal’s prices back beneath the $1,750 level critical to the confidence of gold bulls. This was despite on Wall Street, the alternative trade to gold, headed for a lower close on concerns that U.S. recovery from the pandemic may take longer than thought. 

for June settled down $30.20, or 1.7%, at $1,721.90 per ounce, snapping a second-day rise that came after last week’s one-month high above $1,760. 

, which tracks real-time trades in bullion, slid by $20.37, or 1.2%, to $1,727.55. On Friday, spot gold hit 7-1/2 year highs of $1,751.54.

Nearly 2.5 million more Americans filed for first-time unemployment claims last week, bringing the total number of U.S. job losses from Covid-19 to around 39 million, the Labor Department said on Thursday. The latest weekly filings were, however, lower from the previous week’s.

For gold bulls particularly, their failed attempt again to capture a futures settlement at above the $1,760 showed they might want to consider scaling back on long-term positions, said Ed Moya, analyst at New York’s OANDA.

Gold had been unable to breach that key resistance despite little changes to the U.S. fundamental backdrop, with trillions of dollars of new anti-Covid-19 stimulus expected to be pumped into the economy, amid speculation that negative interest rates and a second wave of infections from the virus could occur. 

“Gold needs a healthy pullback before prices can once again target uncharted territory,” Moya said. “If downward momentum persists, gold could see initial support around the $1,675 level.”