2024.02.0118:13:00UTC+00Gold Futures Settle Modestly Higher As Dollar Weakens

Gold futures settled higher on Thursday as the dollar turned weak after the Pound rebounded with markets paring bets of near-term rate cuts from the Bank of England after Governor Andrew Bailey said the policymakers need more evidence that inflation would fall to 2% and stay there for a while.

Fed Chair Jerome Powell said the U.S. central bank is unlikely to have enough confidence about inflation to cut rates as soon as March.

CME Group's FedWatch Tool is currently indicating a relatively modest 38% chance of a March rate cut but a nearly 100% chance rates will be lower by early May.

The dollar index dropped to 103.03, losing nearly 0.25%.

Gold futures for April ended higher by $3.70 at $2,071.10 an ounce.

Silver futures for March ended up $0.067 at $23.236 an ounce, while Copper futures for March settled at $3.8535 per pound, down $0.0525 from the previous close.

In U.S. economic news, the Labor Department released a report showing first-time claims for U.S. unemployment benefits unexpectedly saw a modest increase in the week ended January 27th, rising to 224,000, an increase of 9,000 from the previous week's revised level of 215,000.

Economists had expected jobless claims to edge down to 212,000 from the 214,000 originally reported for the previous week.

On Friday, the Labor Department is scheduled to release its more closely watched report on employment in the month of January.

Economists currently expect employment to increase by 180,000 jobs in January after jumping by 216,000 jobs in December, while the unemployment rate is expected to inch up to 3.8 percent from 3.7%.

Meanwhile, a reading on U.S. manufacturing activity unexpectedly increased in the month of January but continues to indicate contraction, according to a report released by the Institute for Supply Management on Thursday.

The ISM said its manufacturing PMI rose to 49.1 in January from a downwardly revised 47.1 in December. While a reading below 50 still indicates contraction, economists had expected the index to edge down to 47.0 from the 47.4 originally reported for the previous month.