Gold Futures Settle Slightly Higher

Gold prices edged up marginally on Thursday, extending previous session’s gains, after the dollar stayed somewhat subdued against most major currencies amid speculation there would be a pause in U.S. interest rate hikes in the coming year.

The Federal Reserve Chair Jerome Powell’s comments on Wednesday that interest rates were currently “just below the broad range of estimates of the level that would be neutral for the economy,” seem to suggest that the Fed’s tightening cycle is drawing to a close. However, a 25 basis points high in rate next month, looks imminent.

Gold futures for February ended up $0.60, or 0.05%, at $1,230.40 an ounce. On Wednesday, gold futures ended up $9.90, or 0.8%, at $1,229.80 an ounce.

Gold futures for March settled at $1,230.40 an ounce.

Silver futures for March ended down 0.6% at $14.37 an ounce, while Copper futures for March ended down 1% at $2.785 per pound.

Gold futures fell slightly after the Federal Reserve released the minutes of its November meeting. The minutes indicate a hike in December but showed officials laying stress on a flexible approach to rate increases in 2019 and that they wanted to remove ‘further gradual increases’ in interest rates from statement.

The focus is now on the upcoming G20 meeting in Argentina. U.S. President Donald Trump is set to meet with Chinese President Xi Jinping on the sidelines of the summit. Although a substantive breakthrough is unlikely, it is hoped that the two sides will agree on a communique for a de-escalation of trade tensions.

In U.S. economic news, a report from the National Association of Realtors showed a substantial decrease in pending home sales in the month of October. NAR said its pending home sales index plunged by 2.6% to 102.1 in October after climbing by 0.7% to an upwardly revised 104.8 in September. With the steep drop, the index fell to its lowest level since mid-2014.

The sharp pullback surprised economists, who had expected pending home sales to rise by 0.5%, matching the increase originally reported for the previous month.

The Labor Department also released a report showing initial jobless claims unexpectedly rose to a six-month high in the week ended November 24th. The report said initial jobless claims climbed to 234,000, an increase of 10,000 from the previous week’s unrevised level of 224,000. Economists had expected jobless claims to edge down to 220,000.

With another unexpected increase, jobless claims reached their highest level since hitting a matching figure in the week ended May 19th.

Meanwhile, a separate report from the Commerce Department showed personal income and spending both increased by more than anticipated in the month of October. The report said personal income climbed by 0.5% in October after edging up by 0.2% in September , while personal spending advanced by 0.6% in October after rising by 0.2% a month earlier.

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