2022.12.0117:58:00UTC+00Gold Futures Settle Sharply Higher As Dollar Slips On Powell's Dovish Comments

Gold prices rose sharply on Thursday as the dollar tumbled after comments from Federal Reserve Chairman Jerome Powell indicated smaller interest rate hikes from as early as December.

The dollar index dropped to 104.66 this morning, and despite recovering to 104.82, remains nearly 1.1% down from the previous close.

Gold futures for February ended higher by $55.30 or about 3.1% at $1,815.20 an ounce, the highest settlement since mid-August.

Silver futures for March ended up $1.060 at $22.841 an ounce, while Copper futures for March settled at $3.8175 per pound, gaining $0.0795.

In his speech at the Brookings Institution event on Wednesday, Powell said that time for moderating the pace of interest rate increases may come as soon as at the December meeting.

"Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level," he said.

In U.S. economic releases, a report from the Institute for Supply Management showed the ISM Manufacturing PMI slipped to 49.0 in November from 50.2 in October, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 49.8.

Meanwhile, a separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits pulled back by more than expected in the week ended November 26th, falling to 225,000, a decrease of 16,000 from the previous week's revised level of 241,000.

Economists had expected jobless claims to edge down to 235,000 from the 240,000 originally reported for the previous week.

A report from the Commerce Department showed personal income climbed by 0.7% in October after rising by 0.4%. Personal spending advanced by 0.8% in October after climbing by 0.6% in September.

A reading on inflation said to be preferred by the Fed showed core consumer prices, which exclude food and energy prices, edged up by 0.2% in October after climbing by 0.5% in September. Economists had expected prices to rise by 0.3%.

The annual rate of core consumer price growth also slowed to 5% in October from 5.2% in September, coming in line with estimates.