(Reuters) – On Thursday, gold hit a 1-month high after data showed U.S. unemployment benefits’ claims dropped less than estimated, strengthening expectations the Federal Reserve will postpone monetary stimulus tapering.
Spot gold increased 1.2% to its highest since September 20 reaching $1,348.24 an ounce just before the U.S. data was released.
By 1346 GMT the yellow metal was 0.9% up at $1,343.41, whereas U.S. December gold futures for delivery increased $9.30 an ounce at $1,343.30.
The London P.M. fix is $1,344.75.
MKS SA senior vice president Bernard Sin said “A lot of people positioned themselves for a lower figure (than the previous week) just ahead of the jobs release and prices were pushed higher,” and also added “Overall, gold should be supported in the short term, especially if U.S. data keeps falling short of expectations, that should put further pressure on the dollar and reinforce the argument for the Fed to keep its stimulus.”
The dollar continued weak against other major currencies, having earlier hit a 2-year low versus the euro, whereas U.S. Treasury yields traded around 3-month lows. Global shares as well were slightly higher.
Gold dropped to around 3-year low in June on assumption that the Fed was set to taper its stimulus programme, which would decrease inflation risk.