Gold Futures Settle Near 4-week High As Dollar Drifts Lower

Gold futures settled at near four-week high on Thursday as the dollar fell and bond yields dropped to a one-month low.

Dollar drifted lower amid rising prospects of the Fed stopping interest rate hike after data showed both headline and core inflation in the U.S. rose at a slower-than-expected pace in June.

The Fed is still widely expected to raise interest rates by another quarter point later this month, there is now optimism that the central bank is nearing the end of its tightening campaign.

The dollar index dropped to 99.83, losing about 0.7%.

Gold futures for August ended higher by $2.10 or about 0.1% at $1,963.80 an ounce.

Silver futures for September ended up $0.639 at $24.949 an ounce, while Copper futures for September settled at $3.9400 per pound, gaining $0.0870.

Data released by the Labor Department this morning showed producer prices in the U.S. inched up by slightly less than expected in the month of June. The data said its producer price index for final demand crept up by 0.1% in June after falling by a revised 0.4% in May.

Economists had expected producer prices to rise by 0.2% compared to the 0.3% dip originally reported for the previous month.

The report also said the annual rate of producer price growth slowed to just 0.1% in June from a revised 0.9% in May. The pace of growth was expected to slow to 0.4% from the 1.1% originally reported for the previous month.

Following yesterday’s tamer-than-expected consumer price inflation data, the data has further eased concerns about the outlook for interest rates.

Meanwhile, a separate Labor Department report showed initial jobless claims slipped to 237,000 in the week ended July 8th, a decrease of 12,000 from the previous week’s revised level of 249,000. Economists had expected jobless claims to inch up to 250,000 from the 248,000 originally reported for the previous month.

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