Gold traded near a record high as latest US data kept alive bets on the Federal Reserve’s interest-rate cuts.
US retail sales strengthened in September by more than forecast in a broad advance, Commerce Department data showed Thursday. Meanwhile, US jobless claims unexpectedly fell after jumping the previous week in Southeastern states affected by Hurricane Helene, according to the latest US Labor Department report.
Treasury yields and the dollar pushed higher after the economic reports, which saw bullion pare some of the early gains after hitting a new high of $2,687.67 an ounce. The euro’s drop after the European Central Bank’s rate cut earlier Thursday — the third time this year — also helped drive the greenback higher.
The data points added to a slew of mixed US economic readings recently, reinforcing gold traders’ expectations that the Fed will continue its rate-cutting path for the rest of the year.
“These were good data points,” said Bob Haberkorn, senior market strategist at RJO Futures. “I think the Fed wants to get rates lower and they probably have another quarter point coming here at the very least before the end of the year, which is rates get lower, gold should get stronger.”
The precious metal is also getting strong support from ongoing tensions in the Middle East. Israel said an operation in Gaza may have killed Hamas leader Yahya Sinwar, part of a renewed assault against the militant group after more than a year of war in the Palestinian territory.
Lower rates tend to benefit non-interest bearing bullion.
Gold is up 1.1% this week, with investors repositioning portfolios ahead of the US election on Nov. 5. With both candidates posing different risks to the economy, gold likely will see further support — no matter whether Donald Trump or Vice President Kamala Harris wins.
Bullion — up more than 30% this year — is one of the strongest performing commodities. Rate-cut optimism fueled the most recent gains as the Fed kicked off its easing cycle last month. Strong central bank purchases have also supported gold.
Spot gold was 0.5% higher at $2,685.52 an ounce at 9:50 a.m. in New York. The Bloomberg Dollar Spot Index was up 0.1%. Silver, palladium and platinum edged higher.
—With assistance from William Clowes and Sybilla Gross.
