Gold price surges 2.1% to $1,202; WTI adds 0.9% to $60.45
San Francisco (Jun 18) Gold futures climbed past $1,200 an ounce today to finish at their highest level in nearly a month as the Federal Reserve signaled it will raise interest rates at a gradual pace, pressuring the U.S. dollar.
Gold for August delivery leapt 2.1 percent to settle at $1,202 an ounce on Comex. That was the highest settlement since May 22 for a most-active contract.
Prices began climbing in electronic trade yesterday as the Fed indicated that while it expects its benchmark fed-funds rate to eventually rise to 3.75 percent in the “longer run,” the likely path to that level will be gradual.
The Fed’s view pressured the U.S. dollar, which tends to benefit from higher interest rates. In turn, gold and other commodities found support from the dollar’s decline, as a cheaper dollar makes those commodities less expensive to users of other currencies.
Gold prices continued to trade higher following a spate of U.S. economic data today.
The May consumer-price index saw its biggest gain in more than two years, but was still lower than economists had expected. Weekly jobless claims fell to 267,000, holding ground near a 15-year low.
The Fed, which has been using various economic data to gauge the economy’s readiness for a rate increase, is generally expected in September to announce its first rate hike since 2006.
Other metals prices advanced today, with July silver up 1.3 percent at $16.153 an ounce. July platinum added 0.9 percent to $1,082.80 an ounce, while September palladium shed 0.2 percent to $718.65 an ounce. July copper rose 0.4 percent to $2.616 a pound.
In energy trading, oil futures climbed Thursday, with U.S. benchmark prices settling at their highest in a week, buoyed by a weaker U.S. dollar and a seventh straight week of falling U.S. crude inventories.
July crude tacked on 0.9 percent to settle at $60.45 a barrel on the New York Mercantile Exchange. That was the highest settlement for a most-active contract since June 11.
Brent crude for August delivery rose 0.6 percent to $64.26 a barrel on London’s ICE Futures exchange.
Data released yesterday from the U.S. Energy Information Administration showed crude stockpiles fell by 2.7 million barrels last week, the seventh weekly decline in a row.
Domestic production also fell, but stockpiles at the futures trading hub in Cushing, Oklahoma, rose for the first time in five weeks and gasoline inventories climbed unexpectedly.