Investing.com -- Gold futures surged by more than 1% on Thursday amid a weaker dollar, as investors covered short positions one day after the precious metal fell to fresh five-year lows.
On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a broad range between $1,068.60 and $1,083.50 an ounce before settling at $1,079.70, up 10.80 or 1.01% on the session. Thursday's rally halted an extended skid where gold tumbled approximately nearly 10% since peaking above $1,185 an ounce in mid-October. On Wednesday, gold slipped below $1,065 after the minutes from the Federal Open Market Committee's October meeting provided further indications that the U.S. central bank could raise short-term interest rates when it meets again next month.
Last week, initial jobless claims in the U.S. fell by 5,000 to 271,000, in line with consensus analysts' forecasts of 270,000 claims for the week ending on Nov. 14. At 270,750, the four-week average is up by 7,500 versus the same reading from October. Gold has been in freefall since a robust U.S. jobs report for October provided the hawks on the Federal Reserve with ammunition for a December rate hike.
The minutes from the FOMC's October meeting, released on Wednesday, showed that the majority of the committee's members judged that significant global financial risks had diminished enough to strongly consider a rate hike when it meets next on Dec. 15-16. In each of the last two meetings the FOMC has voted 9-1 to hold its benchmark Federal Funds Rate at its current rate between zero and 0.25%. The rate, which banks use for interbank overnight loans at the Federal Reserve Bank of New York, has remained at a near-zero level since December, 2008. Nearly a decade has passed since the Fed last raised short-term rates.
A rate hike is viewed as bearish for gold, which struggles to compete with high-yield bearing assets.
Metal traders also kept an eye on developments related to last week's terrorist attacks in Paris after authorities in Saint Denis detained seven suspects and killed two others in raids on Wednesday. Abdelhamid Abaaoud, the suspected ringleader of the attacks, was killed in the roundup, the Paris' prosecutor's office confirmed. Separately, terrorist attacks in the West Bank on Thursday claimed the lives of three people, including an American tourist.
Gold is regarded as a safe haven asset for investors in periods of heightened geopolitical instability.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell as much as 0.70% to an intraday low of 98.80, before moving back above 99 in U.S. afternoon trading. On Wednesday, the index reached a fresh seven-month at 99.97. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for December delivery gained 0.154 or 1.09% to 14.235 an ounce.
Copper for December delivery fell 0.002 or 0.09% to 2.076 a pound.