Investing.com - Gold prices added to overnight gains on Thursday, hitting a one-week high as the U.S. dollar's 11-day winning streak ran out of steam despite a brighter outlook for interest rate hikes.
Gold for April delivery on the Comex division of the New York Mercantile Exchange rose $7.55, or about 0.6%, to $1,240.65 a troy ounce by 9:50AM ET (14:50GMT).
It earlier rose to a session high $1,241.20, a level not seen since February 9. Prices gained $7.70, or about 0.6%, on Wednesday, snapping a four-session losing streak.
The dollar index was down around 0.45% to 100.63 in early New York morning hours, moving away from Wednesday's high of 101.75, which was its strongest level since January 12.
Up until Wednesday, the dollar index had enjoyed a 10-session winning streak.
Market players digested another raft of mostly upbeat U.S. economic data, which reinforced the idea that the Federal Reserve could raise interest rates as early as next month.
The number of people who filed for unemployment assistance in the U.S. last week rose by a less-than-expected 5,000 to 239,000 last week, holding close to the lowest level since 1973.
A separate report showed that the Philadelphia Fed index surged to a reading of 43.3 from 23.6 in January. That was the highest level since early 1984.
Data also showed that building permits jumped by 4.6% to 1.285 million units last month from 1.210 million in December.
However, U.S. housing starts fell by 2.6% to 1.246 million units last month from December’s total of 1.279 million units.
Hawkish comments by Fed Chair Janet Yellen combined with better-than-expected U.S. economic data this week boosted prospects of a March interest rate hike from the Fed.
Fed fund futures priced in around a 27% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool, up from less than 10% at the start of the week. Odds of a June increase was seen at around 74%.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Also on the Comex, silver futures for March delivery inched up 13.5 cents, or 0.75%, to $18.09 a troy ounce, the most since mid-November.
Meanwhile, platinum gained 1% to $1,019.80, while palladium tacked on 1%, to $793.62 an ounce.
Elsewhere in metals trading, copper futures slipped 3.9 cents, or about 1.4%, to $2.702 a pound.
Prices of the red metal pulled back from a 20-month peak of $2.822 touched on Monday as talks renewed between striking workers and management at Chile's Escondida copper mine.
The mine, which is owned by BHP Billiton (LON:BLT), produced over 1 million tonnes of copper, about 5% of the world's total in 2016.