Gold Futures Settle Slightly Higher

Gold futures settled higher on Thursday as a drop in U.S. bond yields and data showing an increase in jobless claims prompted traders to pick up the safe-haven asset.

Traders also digested the European Central Bank’s monetary policy announcement.

The yield on U.S. 10-year Treasury Note dropped to around 1.247%, paring some early gains. The dollar index rebounded from morning lows and limited gold’s uptick.

The dollar index, which slid to 92.51, rose to 92.92 past noon, and was last seen hovering around 92.85, up more than 0.1% from the previous close.

Gold futures for August ended up by $2.00 or about 0.1% at $1,895.40 an ounce, a day after dropping to their lowest close in about two weeks.

Silver futures for September ended higher by $0.13 or about 0.5% at $25.38 an ounce, while Copper futures for September settled around $4.34 per pound, gaining about 1.5%.

Data from the Labor Department showed initial jobless claims in the U.S. unexpectedly climbed to 419,000 in the week ended July 17th, an increase of 51,000 from the previous week’s revised level of 368,000.

Economists had expected jobless claims to edge down to 350,000 from the 360,000 originally reported for the previous week.

Meanwhile, a separate report from the National Association of Realtors showed existing home sales jumped by 1.4% to an annual rate of 5.86 million in June after slumping by 1.2 percent to a revised rate of 5.78 million in May.

Economists had expected existing homes sales to surge up by 1.7% to a rate of 5.90 million from the 5.80 million originally reported for the previous month.

The ECB left its key interest rates unchanged, but revised its forward guidance on the same to support its new inflation target. The central bank left the main refinancing rate at 0%, the deposit rate at -0.5% and the marginal lending rate at 0.25%, in line with economists’ expectations.

Policymakers decided to revise its forward guidance on interest rates as the key ECB interest rates have been close to their lower bound for some time and the medium-term outlook for inflation is still well below the Governing Council’s target.

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