Gold trimmed gains on Thursday (September 25) after U.S. weekly jobless claims unexpectedly fell, while investors awaited key inflation data that could shape the Federal Reserve's next interest rate move.

Spot gold rose 0.1% to $3,741.88 an ounce, as of 9:33 a.m. ET (13:33 GMT), after rising as much as 0.5% earlier in the session. Prices hit a record high of $3,790.82 on Tuesday. U.S. gold futures for December delivery rose 0.1% to $3,771.60.

The number of Americans filing new applications for unemployment benefits fell last week, but the labor market has lost traction amid sluggish hiring. Meanwhile, the U.S. economy grew faster than previously estimated in the second quarter.

"Jobless claims came in at 218,000, versus expectations of 235,000, a slightly hawkish figure that may dampen some rate-easing expectations, but it's not enough to change the overall trend," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

"The biggest near-term risk for gold is a higher-than-expected PCE reading. If inflation surprises higher, that could boost the dollar and weigh on gold for a while." Friday's personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, is expected to show a 0.3% monthly increase in August and a 2.7% annual increase, according to a Reuters poll.

The market currently sees an 81% probability of a Fed rate cut in October, down from 90% before the employment data release, according to the CME FedWatch tool. FEDWATCH: San Francisco Federal Reserve Bank President Mary Daly reiterated her "full support" for last week's 25 basis point interest rate cut and signaled openness to further cuts. In contrast, Fed Chair Jerome Powell maintained a more cautious stance on Tuesday.

Safe-haven gold bullion tends to thrive in low interest rate environments. Among other metals, spot silver rose 1.6% to $44.58 per ounce, platinum rose 1.8% to $1,499.45, and palladium rose 2.5% to $1,240.21. (alg)

Source: Reuters