By Anjana Anil
(Reuters) – Gold prices rose to a more-than-one-month high on Thursday after the latest U.S. economic data pressured the Treasury yields further, following a soft core inflation reading this week that increased bets for a more dovish Federal Reserve policy.
Spot gold gained 0.9% to $2,719.49 per ounce as of 11:20 a.m. ET (1620 GMT), hitting its highest since Dec. 12. Prices hit an all-time high of $2,790.15 on Oct. 31, 2024.
U.S. gold futures rose 1.3% to $2,752.80.
Initial claims for state unemployment benefits rose to a seasonally adjusted 217,000 for the week ended Jan. 11, the Labor Department said on Thursday. A Reuters poll had forecast 210,000 claims.
“The initial jobless claims were more than expected, so that signals some weakening in the labour market,” said Alex Ebkarian, chief operating officer at Allegiance Gold.
“We also saw the U.S. Treasury yields dropping, so we’re seeing the attractiveness of gold re-invigorating.”
U.S. Treasury yields pared gains and were trading near a one-week low after retail sales, jobless claims and import prices data.
Gold prices extended gains on Wednesday after data showed core U.S. inflation increased 0.2% in December after rising 0.3% for four straight months, also giving hopes for easing monetary policy.
Markets now expect the Fed to deliver 37 basis points (bps) worth of rate cuts by year-end, compared with about 31 bps before the inflation data.
Gold is seen as a hedge against inflation, but higher interest rates tarnish non-yielding bullion’s allure.
“Gold should find itself in a supportive environment, so long as market participants can hold on to expectations for Fed rate cuts in 2025,” said Exinity Group chief market analyst Han Tan.
Elsewhere, Israel airstrikes killed at least 77 people in Gaza, hours after a ceasefire deal was announced to bring an end to 15 months of war.
Spot silver rose 0.5% to $30.80 per ounce and platinum added 0.6% to $944.00, while palladium fell 1.9% to $943.00.
(Reporting by Anjana Anil and Anushree Mukherjee in Bengaluru; Editing by Vijay Kishore and Mohammed Safi Shamsi)
