(Reuters) – Gold steadied on Thursday, paring losses from a 1% dip earlier in the session, as the dollar’s rally faded and some safe haven buying returned on expectations of a huge jump in U.S. jobless claims due to the coronavirus pandemic.

Spot gold was little changed at $1,612.14 per ounce by 1102 GMT.

“Short term, initially gold may rise when stocks fall because it’s a safe haven asset. However if selling in stocks continue, funds may see margin calls and need to sell gold for cash,” said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS

“Long term, with all the liquidity central banks are injecting into the system, there will be massive purchasing power destruction in the future, which will be good for gold.”

Data showing U.S. initial jobless claims is due at 1230 GMT, with forecasts ranging from 250,000 claims to 4 million.

These expectations stalled a rally in the dollar, bolstering gold’s appeal, and drove world stocks lower.

The U.S. Senate on Wednesday overwhelmingly backed a $2 trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus, but that did little to prop up risk sentiment.

This came after the U.S. Federal Reserve said on Monday it would buy bonds in unlimited numbers and backstop direct loans to companies.

“We see real interest rates remaining negative for a long time, keeping the non-yielding gold investments attractive… Any price setback will be an opportunity to buy gold,” said Soni Kumari, commodity strategist at ANZ.

Gold market participants, meanwhile, remained concerned about a supply squeeze in the market, following a sharp divergence in London and New York prices as the coronavirus closed precious metals refineries.

U.S. exchange operator CME Group on Tuesday announced a new gold futures contract to combat price volatility caused by the shutdown of gold supply routes, but traders and bankers said it would not immediately calm markets.

U.S. gold futures fell 0.3% to $1,629.20 per ounce, retreating from a rally to $1,699.30 on Wednesday, but held above the London spot contract.

Elsewhere, palladium eased 2.4% to $2,261.27 per ounce, having registered its largest daily gain since 1997 on Wednesday as a lockdown in major producer South Africa exacerbated supply woes.

“Palladium is still not on very firm ground as the metal is more sensitive to economic meltdown,” ANZ’s Kumari said.

Platinum slipped 2.6% to $718.88 an ounce, while silver was down 0.4% to $14.37.