Gold Futures Recover From Early Lows, Settle Marginally Up


Gold futures ended slightly higher on Thursday, rebounding strongly from the session’s lows as data showing initial jobless claims held at their highest level since October 2021 in the week ended June 9th helped ease concerns about any aggressive monetary tightening.

Gold prices tumbled earlier in the session as bond yields rose and the dollar climbed after the Federal Reserve signaled that two more rate increases are on the way.

The dollar’s weakness helped pull gold prices off their lows. The dollar index dropped to 102.12, losing more than 0.8%.

Gold futures for August ended higher by $1.80 or about 0.1% at $1,970.70 an ounce, recovering strongly from a low of $1,936.10.

Silver futures for July ended down $0.158 at $23.947 an ounce, while Copper futures for July settled at $3.9000 per pound, gaining $0.0275.

The Fed, which held interest rates steady on Wednesday, as widely expected, signaled that borrowing costs will likely rise by another half of a percentage point by the end of this year.

The European Central Bank today increased the main refinancing rate, or refi, by 25 basis points to 4%. The previous change in the interest rates was a similar hike in May. The ECB has raised rates in every policy session since July last year, by a cumulative 350 basis points.

The ECB expects core inflation, excluding energy and food, to reach 5.1% in 2023, before easing to 3% next year, and further down to 2.3% in 2025. The Eurozone economy is now projected to grow by 0.9% this year, 1.5% next year and 1.6% in 2025.

In U.S. economic news, data from the Labor Department showed initial jobless claims came in at 262,000 for the week ended June 9th, unchanged from the previous week’s revised level. Economists had expected jobless claims to dip to 249,000 from the 261,000 originally reported for the previous week.

A separate Labor Department report showing import prices in the U.S. fell by much more than expected in the month of May has also generated optimism about the outlook for inflation.

The report said import prices slid by 0.6% in May, reflecting a sharp pullback in prices for fuel imports and a modest decrease in prices for non-fuel imports. Economists had expected import prices to edge down by 0.1%.

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