Gold prices rose on Thursday, with the decline in the dollar and US Treasury yields, while traders await new indications of the Federal Reserve’s (US Central Bank) plans to raise interest rates.
Spot gold rose 0.2 percent to $1,807.57 an ounce at 0303 GMT, following falling 1 percent in the previous session. US gold futures fell 0.1 percent to $1,814.30.
The dollar index fell 0.2 percent. A weaker dollar makes bullion more attractive to buyers who hold other currencies. And the benchmark US Treasury bond yields fell for ten years, following reaching a six-week high in the previous session.
Traders will study the US weekly jobless claims numbers, which are released at 1330 GMT, to see its potential impact on the Federal Reserve’s rate hike strategy.
“The unemployment data will be important. If it shows an increase in claims (for the benefit), it should weaken the dollar and support gold,” said Ajay Kedia, director at Kedia Commodities in Mumbai.
Bullion is on track for an annual decline of regarding 1 percent, pressured by sharp increases in US interest rates. However, prices rose nearly $200 from a more than two-year low hit in September on hopes the US central bank will slow the pace of interest rate increases.
The Fed slowed that pace to 50 basis points in December, following four consecutive increases of 75 basis points each, while Fed Chairman Jerome Powell stressed the need to keep interest rates high for some time to combat inflation.
High interest rates weaken the attractiveness of gold as a hedge once morest inflation and increase the opportunity cost of owning the yellow metal because it does not yield a return.
In terms of other precious metals, the price of silver in spot transactions rose 0.2 percent to 23.57 dollars, platinum rose 0.3 percent to 1010.67 dollars, and palladium increased 0.2 percent to 1786.97 dollars.