Gold futures settled slightly higher on Thursday, extending gains to a second straight day, as the dollar pared gains and bond yields dropped again.
A slightly weak dollar and a drop in U.S. long term bond yields supported gold’s uptick.
Traders digested the Labor Department’s data that showed U.S. inflation hit a 13-year high in May. The data said
The dollar index, which rose to 90.31, dropped to a low of 89.98 in late morning trades before edging up to 90.08, down slightly from the previous close.
The yield on 10-year Treasury Note dropped to a low of 1.47%, a new low since early March.
Gold futures for August ended up by $0.90 or nearly 0.1% at $1,896.40 an ounce, well off the day’s low of $1,871.80. Gold futures gained almost 0.1% in the previous session.
Silver futures for July ended up by $0.029 at $28.031 an ounce, while Copper futures for July settled at $4.4850 per pound, down $0.0460 from the previous close.
Data released by the Labor Department showed a bigger than expected increase in consumer prices in the month of May. The data said the U.S. consumer price index rose by 0.6% in May after climbing by 0.8% in April. Economists had expected consumer prices to increase by 0.4%.
The report also showed consumer prices in May were up by 5% compared to the same month a year ago, reflecting the biggest spike since August of 2008. The annual rate of core consumer price growth also accelerated to 3.8% in May, which represents the biggest jump since June of 1992.
Another data from the Labor Department showed a modest drop in first-time claims for unemployment benefits in the U.S. The report said jobless claims dipped to 376,000 from the previous week’s unrevised level of 385,000. Economists had expected jobless claims to fall to 370,000.
The Governing Council of the European Central Bank, led by ECB President Christine Lagarde, today left key interest rates unchanged and maintained the size of the pandemic emergency purchase programme, or PEPP, at EUR 1,850 billion.
The ECB has raised Eurozone growth forecasts for this year and next and said the risks to the outlook were balanced. Policymakers also raised the inflation forecast for the two years, but expect underlying inflationary pressures to remain subdued.
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