
ISLAMABAD: Gold prices reached their highest level in more than a month on Thursday, as softer U.S. economic data put further pressure on Treasury yields, boosting the appeal of the precious metal. Spot gold rose 0.8%, reaching $2,718.00 per ounce, the highest since December 12, while U.S. gold futures climbed 1.1% to $2,748.60.
The recent data revealed a rise in initial jobless claims to 217,000 for the week ending January 11, surpassing expectations. The increase in claims signals some softness in the labor market, which contributed to the decline in U.S. Treasury yields and made gold more attractive. Alex Ebkarian, chief operating officer at Allegiance Gold, noted that the weakening labor market and lower yields have sparked renewed interest in gold.
Additionally, core U.S. inflation data for December showed a smaller-than-expected increase of 0.2%, compared to the previous months’ 0.3% rise, reinforcing expectations of a more dovish Federal Reserve policy. This led to higher market expectations for a 37-basis-point rate cut by the end of 2025, compared to 31 basis points before the inflation data was released.
Gold, traditionally seen as a hedge against inflation, tends to gain in environments where yields are lower and central banks ease monetary policies. Han Tan, chief market analyst at Exinity Group, stated that gold should remain supported as long as expectations for Fed rate cuts continue.
Meanwhile, other precious metals also saw price movements. Spot silver increased by 0.3%, reaching $30.74 per ounce, and platinum edged up 0.2% to $940.00. Palladium, however, saw a decline, dropping 1.9% to $943.00.
The global economic landscape remains a key driver for gold, with market participants closely monitoring U.S. economic indicators and the Federal Reserve’s next moves.
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