Gold climbs 1% as U.S. jobs data soothes investors

FILE PHOTO: Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk

(Reuters) - Gold jumped on Thursday as the dollar retreated, after data showed U.S. jobless claims grew more than expected last week, providing some hope to investors that the Federal Reserve’s interest rate hikes could be less aggressive than feared.

Spot gold gained 1.1% to $1,832.75 per ounce, as of 2:19 p.m. ET (1919 GMT). U.S. gold futures rose 0.9% to settle at $1,834.60.

“Gold has had a rough week because of what (Jerome) Powell said on raising rates... but the significant increase in jobless claims has gold trading higher”, along with a weaker dollar, said Bob Haberkorn, senior market strategist at RJO Futures.

The number of Americans filing new claims for unemployment benefits increased by the most in five months last week, but the underlying trend remained consistent with a tight labor market.

The dollar index slipped 0.4%, making bullion a more attractive bet. [USD/]

“The fact that we’re possibly starting to see a crack in labor numbers is having gold traders thinking maybe the Fed can’t do a half-basis-point hike at the next meeting,” Haberkorn said, adding that a big miss in nonfarm payrolls (NFP) numbers on Friday can send gold higher through $1,850.

On Wednesday, Fed Chair Jerome Powell reaffirmed his message of higher and potentially faster interest rate hikes, but emphasized that debate was still underway with a decision hinging on data to be issued before the U.S. central bank’s policy meeting in two weeks.

“If you’re a bull, you’re rooting for softer-than-expected U.S. data into the FOMC meeting. The opposite will likely force downside re-tests of $1,788 for gold and $19.00 for silver,” Erik Bregar, Director, FX & Precious Metals Risk Management at Silver Gold Bull Inc told the Reuters Global Markets Forum.

Spot silver gained 0.6% at $20.12 per ounce, platinum rose 0.8% to $945.02 and palladium added 2.1% to $1,401.53.

Reporting by Bharat Govind Gautam, Ashitha Shivaprasad and Lisa Mattackal in Bengaluru; Editing by Shilpi Majumdar and Krishna Chandra Eluri