Investing.com - Gold prices held on to overnight gains in North American trade on Thursday, after a pair of U.S. economic reports did little to alter expectations that Federal Reserve interest rates would stay lower for longer.
Gold for December delivery on the Comex division of the New York Mercantile Exchange tacked on $7.65, or 0.57%, to trade at $1,356.45 a troy ounce by 8:46AM ET (12:46GMT), after falling $8.10, or 0.6%, on Wednesday.
The number of individuals filing for initial jobless benefits fell by 4,000 last week to a one-month low of 262,000, the Labor Department said. Analysts expected jobless claims to decline by 1,000 to 265,000 last week.
A separate report showed that manufacturing activity in the Philadelphia-region recovered as expected in August after a surprise deterioration in the previous month.
Gold was already higher ahead of the data as odds for a near-term rate hike faded after the minutes of the Fed’s July policy meeting, released Wednesday, showed that committee members remained divided on the timing of the next rate hike.
Fed funds futures are currently pricing in just a 9% chance of a rate hike by September, compared to 15% the day before. December odds were at around 46%, down from 53% a day earlier, according to Investing.com's Fed Rate Monitor Tool.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
The dollar sank to the lowest level in nearly eight weeks on Thursday amid reduced expectations for a Fed rate hike before the end of the year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell to 94.31, the lowest since June 24. It was last at 94.49.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
For the year, the precious metal is up nearly 26%, boosted by concerns over global growth and expectations of monetary stimulus.
Also on the Comex, silver futures for September delivery climbed 11.0 cents, or 0.56%, to trade at $19.75 a troy ounce during morning hours in New York, while copper futures gained 3.4 cents, or 1.58%, to $2.186 a pound.