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Gold Extends Gains As Dollar Dips After Jobless Claims Data

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Gold Extends Gains As Dollar Dips After Jobless Claims Data

(CTN News) – Gold prices rose on Thursday, helped by the decrease in the dollar. This was because preliminary data on U.S. unemployment claims pointed to a cooling in the labor market.

This eased concerns about a harsher Federal Reserve rate hike next year.

For the week ended Dec. 24, the Labor Department reported that the number of initial claims for unemployment benefits rose 9,000 to a seasonally adjusted 225,000. Reuters had forecast 225,000 claims for the latest week of unemployment claims.

The price of $1,817.30 per ounce of spot gold rose 0.7% on Thursday, while the price of $1,826 per ounce of U.S. gold futures increased 0.6%.

As a result of the jobs data, some dollar weakness came along with a backtracking of Treasury yields. This caused gold to turn around, according to Phillip Streible, CEO of Blue Line Futures in Chicago.

He added that markets were light on volume due to the Christmas and New Year’s holidays.

The dollar index dropped by 0.6%, resulting in gold going cheaper for holders of foreign currencies, while the benchmark 10-year Treasury yield eased after hitting a six-week high in the previous session, making cheaper for holders of foreign currencies.

The price of spot gold was also expected to gain nearly 9.5% over the next quarter, down nearly $200 from a more than two-year low hit in September when hopes were high that the U.S. central bank would slow its pace of interest rate increases in the coming months.

In the region of $1,700, Streible believes could find some support at some point over the next few months, with $1,950 being a reasonable target for the average price of gold next year.

Early this week, gold rallied to its highest level in over six months on news that China had been easing COVID quarantine rules further.

However, doubts about the quality of official data have prompted some countries to enact more stringent travel rules for Chinese visitors.

It is estimated that spot silver is now worth $23.94 per ounce, up 1.8% from last week.

“The fact that silver has outperformed is encouraging for gold bulls since this is often a positive indication that the entire metals complex will move higher in the near future,” independent analyst Ross Norman says.

The price of platinum rose 4.6% to $1,054.32, while the price of palladium rose 1.7% to $1,814.75.

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