Gold futures firmed above $2,300 toward the end of the trading week as investors amplified their expectations that the Federal Reserve will cut interest rates following weak labor data. The yellow metal has been regaining momentum on Fed policy projections, which could help the yellow metal eye $2,400 again.
June gold futures rose $14.30, or 0.62%, to $2,336.60 per ounce at 17:10 GMT on Thursday on the COMEX division of the New York Mercantile Exchange. Gold is on track for a weekly gain of 1%, adding to its year-to-date rally of about 13%.
Silver, the sister commodity to gold, topped $28. July silver futures tacked on $0.739, or 2.68%, to $28.34 per ounce. The white metal is poised for a weekly increase of roughly 5%, lifting its year-to-date boost to 18%.
US financial markets paid close attention to the latest labor data that suggested further weakness in the jobs arena.
Initial jobless claims surged to 231,000 for the week ending May 4, according to the Department of Labor. This was up from the upwardly revised 209,000 in the previous week and higher than the consensus estimate of 210,000.
Continuing jobless claims rose to a smaller-than-expected 1.785 million, while the four-week average, which strips the week-to-week volatility, jumped to 215,000.
The latest data resulted in the futures market bolstering its forecast that the Fed will pull the trigger on its first rate cut starting in September. While investors have continually pushed back their projections for rate cuts this year, they believe continued weakness in economic conditions would support monetary policymakers’ decision to slash interest rates.
Meanwhile, the inflation reacceleration and loosening of the labor market could further weaken consumer sentiment. The May University of Michigan Consumer Sentiment Index is anticipated to fall again.
The US Dollar Index (DXY), a gauge of the greenback against a basket of currencies, tumbled 0.25% to 105.28, from an opening of 105.52. The index has been little changed this week and remains up 4% year-to-date.
A weaker buck is good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase.
US Treasury yields were red across the board, with the benchmark ten-year yield shedding 1.6 basis points to 4.467%. The two-year yield fell 2.8 basis points to 4.815%, while the 30-year bond dipped half a basis point to 4.627%.
Fluctuations in interest rates can influence the opportunity cost of holding non-yielding bullion.
In other metal markets, June copper futures added $0.0455, or 1.00%, to $4.588 per pound. June platinum futures rose $7.70, or 0.78%, to $992.30 per ounce. June palladium futures declined $15.70, or 1.64%, to $972.00 an ounce.