Investing.com – Gold prices edged higher on Thursday, on the back of a weaker dollar but gains were capped as expectations grew that the European Central Bank is moving closer to tightening monetary policy.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange rose by $2.52, or 0.20%, to $1,244.53 a troy ounce.
Following the European Central Bank’s decision to keep interest rates unchanged, Draghi said the central bank saw signs of “unquestionable improvement” in Eurozone growth, and indicated that policymakers would discuss changes to the bank’s ultra-loose monetary policy in September.
"We were unanimous in setting no precise date for when to discuss changes in the future," Draghi told a press conference in Frankfurt, Germany. "We simply said that our discussions should take place in the autumn."
Dollar-denominated assets such as gold are sensitive to moves in the dollar – A dip in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand.
The ECB rate decision and press conference from Draghi came ahead of a mixed bag of economic reports on the labor market and manufacturing sector.
The number of Americans who filed for unemployment insurance for the week ended July 16, dropped by 15,000 to 233,000, the Labor Department said.
A separate report from the Federal Reserve bank of Philadelphia’s manufacturing index showed an unexpected dip in manufacturing activity to a seasonally adjusted 19.5 in July, well below expectations of a reading of 24.
The slump in the dollar underpinned moves higher in other precious metals, as silver futures rose 0.18% to $16.326 a troy ounce while platinum futures added 0.62% to $929.90.
Copper traded at $2.715, up 0.17%, while natural gas, fell by 0.39% to $3.054.