The price of gold rose almost 1% this Thursday after new data from the Department of Labor indicated that the number of Americans who filed New jobless claims rose more than expected last weekreinforcing bets that the Federal Reserve will cut interest rates later in the year.
He Spot gold rose 0.9% to $2,329.79 per ounce. US gold futures for June delivery rose 0.6% to $2,336.80 the ounce. The US dollar index fell 0.22% to 105.312.
Initial claims for state unemployment benefits increased by 22,000, to a seasonally adjusted figure of 231,000, in the week ending May 4, the Labor Department reported on Thursday, compared to the 215,000 applications that economists consulted by Reuters had predicted.
The dollar fell against its rivals after the jobs report, making gold cheaper for holders of other currencies. “What we are seeing is a continued impact of expectations of Fed rate cuts, or when those cuts may occur”said David Meger, director of alternative investments and trading at High Ridge Futures.
The latest data indicate a slight weakening of the labor market, reinforcing expectations that the Federal Reserve’s interest rate cuts may occur earlier than expected, which supports markets such as gold and silver, he added.
Lower interest rates reduce the opportunity cost of holding bullion, which does not earn interest. According to the CME’s FedWatch tool, traders currently rate the likelihood of the Federal Reserve cutting rates in September at 67%.
Spot silver rose 2.8% to $28.10 an ounce, spot platinum gained about 1.1% to $982.55 an ounce and spot palladium gained 1.7%. at $968.00 per ounce.
Source: Ambito
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