Gold demand remained strong Thursday, bolstered by a weaker U.S. dollar and a surprise jump in weekly unemployment claims.
The yellow metal was trading at $2,459 per ounce in late morning activity, down $0.28. It’s been a record-breaking week for the commodity, which has already notched two all-time highs, and analysts are predicting a strong finish to cap off the trading week. On Tuesday, gold cruised past the previous record of $2,450 per ounce set on May 20.
Gold found support from a softer U.S. dollar index, which dropped to its lowest point since March, and a surprise jump in unemployment claims.
The slide in the dollar index was mainly due to strong housing data released Wednesday that showed a 3.4% increase in building permits for privately-owned housing units and a 3% bump in privately-owned housing starts last month.
On the labor market front, data released Thursday by the Department of Labor showed 243,000 initial unemployment claims for the week ending July 13 – an increase of 20,000 from the previous week’s upwardly revised level of 223,000 claims. Traders had projected an increase of 229,000 claims.
Additionally Thursday, investors got a gloomier than hoped for picture of the overall economy with the release of The Conference Board’s Leading Economic Index, which declined by 0.2% in June to 101.1, following an upwardly revised decline of 0.4% in May. The index provides a snapshot of where the economy is headed in the near term.
“The U.S. LEI continued to trend down in June, but the contraction was smaller than in the past three months,” said the Board’s Justyna Zabinska-La Monica, the senior manager for business cycle indicators, in a news release accompanying the June data. “The decline continued to be fueled by gloomy consumer expectations, weak new orders, negative interest rate spread, and an increased number of initial claims for unemployment.”
Gold Price Chart
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