The precious metal continued to draw strong support from Wednesday’s minutes of the Federal Reserve’s August meeting, which indicated that the central bank may be close to implementing a third round of easing measures.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,663.95 a troy ounce during U.S. morning trade, rallying 1.6%.
Earlier in the day, prices rose by as much as 1.75% to hit a session high of USD1,667.05 a troy ounce, the highest since May 1.
Gold futures were likely to find support at USD1,610.25 a troy ounce, the low from August 20 and near-term resistance at USD1,672.15, the high from May 1.
The U.S. Department of Labor said the number of people filing for initial jobless benefits last week rose by 4,000 to a seasonally adjusted 372,000, compared to expectations for a decline of 3,000 to 365,000.
The previous week’s figure was revised up to 368,000 from a previously reported 366,000.
The data came after Wednesday’s minutes of the Federal Reserve’s August meeting showed that many policymakers think additional easing may be warranted "fairly soon" unless there is evidence of a "substantial and sustainable" strengthening in the economic recovery.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
Gold gained as much as 15% earlier this year to hit USD1,790 an ounce after the Fed said in January it would keep interest rates near zero until at least late 2014 and indicated that it could introduce a fresh round of asset-purchases.
However, prices have lost almost 7% since late February, as the Fed failed to deliver more easing and amid concerns over the euro zone’s deepening debt crisis, which has fueled demand for the precious metal's hedge, the greenback.
Prices found further support after disappointing Chinese manufacturing data released earlier added to hopes policymakers in Beijing will introduce fresh stimulus measures to boost growth in the world’s second largest economy.
Data released earlier in the day showed that China’s HSBC Flash Purchasing Managers Index fell to a nine-month low of 47.8 in August from a final reading of 49.3 in July, as new orders slumped in the face of weakening global demand.
From a technical standpoint, the precious metal has further room to march higher after prices settled above their 200-day moving average close to the USD1,640-level on Wednesday, indicating bullish chart signals.
Elsewhere on the Comex, silver for September delivery rallied 2.9% to trade at USD30.40 a troy ounce, the highest since May 3, while copper for September delivery jumped 1.4% to trade at a one-month high of USD3.502 a pound.