Gold Prices Bounces Back 5-Year Low After Jobless Claims Hit 40-Year Low

Gold Prices Bounces Back 5-Year Low After Jobless Claims Hit 40-Year Low

Prices of gold futures rallied 5-year lows Thursday following data showed the number of individuals who filed for jobless claim in the US last week dropped to the lowest level since November 1973 as a refuge in the dollar leading some investors to pocket the benefit of falling prices to buy back into the market and supporting the case if a rise in interest rates United States this year.

On the Comex Gold futures delivery in August traded at $1,095.40 a troy ounce. While, Spot gold was up 0.8 percent at $1,101.25 an ounce at 11:52 GMT.

The Labor Department said the number of individuals who filed for unemployment benefits dropped by 26,000 last week to 255,000. Analysts had expected initial unemployment claims to fall to 1000-280000 last week.

Unemployment claims for the first time have remained below the 300,000 level for 20 straight weeks, which is usually associated with a firming labor market.

Gold has come under heavy selling pressure over the past months amid speculation the Federal Reserve will raise interest rates for the first time in 8-years as early as September.

Gold decrease on Monday was aggravated by large trading volume on the Shanghai Gold Exchange after investors poured more than $ 500 million in bullion in seconds for the first during the Asian session.

The technical analysts, who is studying past patterns to estimate the future direction of trading prices, say the next objective for gold below its low Wednesday near $ 1.087 an ounce is $ 1,044, its lowest level in 2010.

Investors remain to reduce their exposure to gold. The shares traded on the largest gold-backed exchange, SPDR Gold Shares, the fund declined for a fifth day on Wednesday to their lowest level since the 2008.

At the Multi Commodity Exchange (MCX), gold recovered Rs 25,000 per kg level, in futures trading as speculators were handed in covering its short position tracking after the precious metal bounced back in global markets.

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