Gold prices rose sharply on Thursday, lifting the most active gold futures contract to a seven-week high, as a string of encouraging economic data lifted prospects of a rise in inflation.
The demand for the safe-haven asset rose also due to rising geopolitical tensions.
The dollar’s weakness and the drop in bond yields following dovish comments from Fed officials supported gold’s uptick.
The dollar index, which slipped to 91.49 in the Asian session, recovered some lost ground as the day progressed, but was still languishing in negative territory at 91.61, down 0.09% from previous close.
Gold futures for June ended up by $30.50 or about 1.8% at $1,766.80 an ounce, the highest close since February 25.
Silver futures for May ended higher by $0.440 at $25.964 an ounce, while Copper futures for May settled at $4.2185 per pound, gaining $0.0900.
Speaking on Wednesday to the Economic Club of Washington, Fed Chair Jerome Powell reiterated that the Fed would only begin winding down its asset purchases when it’s made substantial progress towards its goals.
He also signaled that tapering would happen “well before” the U.S. central bank starts considering raising interest rates.
Data released by the Labor Department showed first-time claims for U.S. unemployment benefits pulled back by much more than anticipated in the week ended April 10th, tumbling to 576,000, a decrease of 193,000 from the previous week’s revised level of 769,000.
Economists had expected jobless claims to decline to 700,000 from the 744,000 originally reported for the previous week.
A report from the Commerce Department showed retail sales skyrocketed by 9.8% in March after tumbling by a revised 2.7% in February. Economists had expected retail sales to surge up by 5.9% compared to the 3% slump originally reported for the previous month.
Separate reports released by the Federal Reserve Bank of New York and the Federal Reserve Bank of Philadelphia on Thursday showed faster growth in regional manufacturing activity in the month of April.
The material has been provided by InstaForex Company – www.instaforex.com