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Gold shoots up dovish Fed language, shrugs off data

Published 10/09/2014, 01:30 PM
Updated 10/09/2014, 01:32 PM
Gold rises on expectations that Fed will take its time raising interest rates

Investing.com - Gold futures shrugged off solid U.S. weekly jobless claims numbers and rose on Thursday in wake of dovish Federal Reserve policy meeting minutes, which curbed expectations that interest rate hikes are looming.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at 1,225.40 a troy ounce, up 1.61%, up from a session low of $1,219.40 and off a high of $1,233.70.

The December contract settled down 0.53% at $1,206.00 on Wednesday.

Futures were likely to find support at $1,183.30 a troy ounce, Monday's low, and resistance at $1,237.00, the high from Sept. 23.

Gold prices continued to see strong demand after Wednesday's minutes from the Fed's Sept. 16-17 policy meeting revealed that a number of monetary authorities believe the bank's current language painted the wrong picture on the timing of rate hikes and that an interest rate rise should be tied to U.S. economic recovery.

The minutes also showed that the U.S. central bank cut its growth outlook due to a stronger dollar and concerns over global weakness.

Gold prices firmed on the news, as the yellow metal has taken a pounding in recent sessions on speculation that interest rates were to set to rise sooner rather than later in 2015.

Elsewhere, the U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Oct. 4 fell by 1,000 to 287,000 from the previous week’s revised total of 288,000.

Analysts had expected jobless claims to rise by 6,000 to 294,000 last week, though gold dismissed the data and rose on monetary policy news.

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Meanwhile, silver for December delivery was up 2.02% at $17.408 a troy ounce, while copper futures for December delivery were up 0.96% at $3.032 a pound.

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