Gold prices climbed higher on Thursday, lifting the most active gold futures contract to a six-week closing high, as weak economic data pushed up the demand for the safe-haven yellow metal.
A weak dollar and a drop in treasury yields helped as well.
Gold also found support after the Federal Reserve said on Wednesday that it will not abandon its ultra-accommodative policies anytime soon.
A report from the World Gold Council indicated global gold demand dropped in the first half of this year, compared to the same period last year. However, it failed to stop the yellow metal’s advance today.
The dollar index dropped to 91.91, losing more than 0.4%.
Gold futures for December ended up by $31.20 or about 1.7% at $1,835.80 an ounce, the highest settlement since June 16.
Silver futures for September ended higher by $0.905 or about 3.6% at $25.782 an ounce, a two-week closing high. Copper futures for September settled at $4.5235 per pound, gaining $0.0415 or 0.9%.
Following the Fed’s slightly hawkish monetary policy announcement, Powell said that the economy is “still a ways off” from reaching a standard of “substantial further progress” to withdraw stimulus measures.
Powell’s comments on inflation and job growth also suggested that “there is still a long way to go” for the Fed to consider a shift in policy.
Meanwhile, the U.S. Senate voted to push forward a bipartisan infrastructure plan amounting to $550 billion, which includes funding for roads, bridges, broadband and other physical infrastructure.
The Commerce Department said real GDP surged up by 6.5% in the second quarter following a 6.3% jump in the first quarter. Economists had expected GDP to spike by 8.5%.
Data released by the Labor Department showed initial jobless claims dipped to 400,000 in the week ended July 24th, a decrease of 24,000 from the previous week’s revised level of 424,000. Economists had expected jobless claims to drop to 380,000 from the 419,000 originally reported for the previous week.
The National Association of Realtors also released a report showing an unexpected pullback in pending home sales in the month of June. NAR said its pending home sales index tumbled by 1.9% to 112.8 in June after soaring by 8.3% to a revised 115.0 in May.
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