Investing.com - Gold futures steadied on Thursday, after the Federal Reserve’s May meeting minutes, raised concerns over whether the Federal Reserve would continue with its plan to introduce two additional rate hikes in 2017.
According to the Federal Reserve's minutes for its 2-3 May meeting, released on Wednesday, most Fed officials said a further increase in short-term interest rates will be needed "soon", fuelling expectations that the U.S. central bank is poised to hike interest rates at its next meeting in June.
According to investing.com’s Fed rate monitor tool, nearly 80% of traders expect the Fed to hike interest rates in June.
The hawkish view that a rate hike was needed soon was offset by comments from some Fed members at the meeting, who said that further signs would need to show that weakness in the first-quarter was temporary, prior to future rate hikes.
U.S. economic growth, measured by Gross Domestic Product (GDP), rose by annualized rate of just 0.7% for the first three months of 2017. It was the slowest period of first-quarter economic growth since 2014.
Gold for June delivery on the Comex division of the New York Mercantile Exchange added $2.85 or 0.23%, to $1,255.95 a troy ounce by 13:32 EDT.
A surge in the dollar, however, weighed on gold prices, which dropped to session lows, following bullish initial jobless claim data, boosting sentiment that the economy is continuing to show signs of a rebound in the second quarter.
The U.S. Department of Labor reported that initial jobless claims rose by 1,000 to 234,000 in the week ended May 18.
Analysts had expected initial jobless claims to rise by 5,000 to 238,000 in the week ended May 18.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.09% to 97.04.
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.
In other metals, silver futures rose 0.53% to $17.21 a troy ounce while platinum futures gained 0.46% to trade at $951.65.
Copper added 0.56% to $2.598, while natural gas dipped by 1.36% to $3.308, after a larger than expected build in U.S. natural gas inventories weighed on sentiment.
The U.S. Energy Information Administration (EIA) reported Thursday that U.S. natural gas stocks increased by 75 billion cubic feet for the week ending May 19.
Analysts were expecting a storage injection of 67 billion cubic feet.