Gold remains at highs as dollar tumbles

Commodities

Sep 07, 2017 17:36 GMT

© Reuters. Gold hit a more than 1-year on Thursday

Investing.com – Gold prices surged on Thursday on the back of a weaker dollar, following data showing weakness in labor market but gains were capped as expectations grew that the European Central Bank is moving closer to tightening monetary policy.

Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose by $11.10 or 0.83%, to $1,350.99, a troy ounce.

Following the European Central Bank’s decision to keep interest rates unchanged, ECB president Mario Draghi said that ECB policymakers would likely make a decision on tapering monetary policy in October but did expressed concerns over the sharp rise in the euro.

Draghi said that the currency’s strength “represents a source of uncertainty which requires monitoring with regard to its implications for the medium term outlook for price stability”.

The sharp rise in the euro came amid a slump in the dollar following data showing initial jobless claims hit a two-year.

Initial jobless claims in the period running from Aug. 27 to Sept. 2 surged by 62,000 to 298,000, reaching the highest level since spring 2015, the Labor Department said Thursday.

Dollar-denominated commodities such as gold are sensitive to moves in the dollar – A dip in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand.

The slump in the dollar supported a broad based rally in other precious metals, as silver futures rose 1.14% to $18.11 a troy ounce while platinum futures added 1.13% to $1018.25.

Copper traded at $3.143, down 0.27%, while natural gas, fell by 0.47% to $2.99.

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