Gold trimmed earlier gains on Thursday 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 $3,739.42 an ounce, as of 1:41 p.m. EDT (1741 GMT), after rising as much as 0.6% earlier in the session. Prices hit a record high of $3,790.82 on Tuesday. U.S. gold futures for December delivery closed 0.1% higher at $3,771.1.
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. This is a slightly hawkish number that may dampen some rate-easing expectations, but 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 is currently pricing in an 85% probability of a Fed rate cut in October, down from 90% before the jobs data release, according to FEDWATCH. San Francisco Fed Bank President Mary Daly reiterated her "full support" for a 25 basis point rate cut last week and signaled openness to further cuts. In contrast, Fed Chairman Jerome Powell maintained a more cautious stance on Tuesday.
Safe-haven gold bullion tends to thrive in a low interest rate environment. Among other metals, spot silver rose 2.2% to $44.87 an ounce, its highest level in more than 14 years. Platinum rose 3.5% to $1,524.15, reaching its highest level since September 2013, while palladium rose 3.6% to $1,254.04. (alg)
Source: Reuters
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