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Gold prices just $30 off record highs
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U.S. weekly jobless claims increase
(Updates prices)
By Deep Kaushik Vakil
April 13 (Reuters) - Gold surged on Thursday as more
weak U.S. economic readings bolstered bets for a pause in
interest rate hikes, with prospects of a mild recession also
sending investors scurrying for the safe-haven.
Spot gold was up 1.4% at $2,042.50 per ounce by 1:40
p.m. EDT (17:40 GMT), its highest since March 2022, and about
$30 shy of its record high hit in 2020. U.S. gold futures settled 1.5% higher at $2,055.30.
Treasury yields dropped and the dollar dipped after data
showed a moderation in the rise in producer prices last month
and an uptick in jobless claims, suggesting the Federal
Reserve's aggressive tightening over the past year was taking a
toll on the economy. "These economic data have reinforced the market's assessment
that the cycle of interest rate hikes is nearing its end, which
makes gold attractive to investors as it does not pay interest
itself," said Alexander Zumpfe, a precious metals dealer at
Heraeus.
Further, U.S. consumer prices barely rose in March as the
cost of gasoline declined, but stubbornly high rents kept
underlying inflation pressures simmering.
"That's an underlying positive environment for gold where
the Fed is done with their interest rate hike cycle, yet
inflation overall remains higher than they would like," said
David Meger, director of metals trading at High Ridge Futures.
This comes after U.S. Fed minutes on Wednesday indicated
that several policymakers considered pausing rate increases and
projected that recent banking sector stress would tip the
economy into recession.
Safe-haven gold tends to gain during times of economic or
financial uncertainty, while lower rates also lift the appeal of
the zero-yield asset.
Spot silver rose 1.6% to a one-year high of
$25.88. Platinum jumped 3.7% to $1,052.70 and palladium gained 3.8% to $1,515.95.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ xau ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Deep Vakil and Ashitha Shivaprasad in Bengaluru; Editing by Sharon Singleton, Shilpi Majumdar and Shweta Agarwal)
