Gold price above $2,000 on softer US economic data

Gold prices firmed above the $2,000 level again on Thursday after soft US data pointed to the economic toll of the Federal Reserve’s interest rate hikes, strengthening the case for an imminent pause.

Spot gold climbed 0.4% to $2,002.21 per ounce by 11:55 a.m. EDT, after hitting a two-week low of $1969.1 in the previous session. US gold futures also rose 0.4% to $2,014.60 per ounce.

[Click here for an interactive chart of gold prices]

The latest data shows that weekly US jobless claims edged up last week, suggesting the labor market is gradually slowing, while a Philadelphia Fed report showed much lower factory activity in the mid-Atlantic region than forecasted.

The new economic data pushed US the dollar index 0.2% lower, while benchmark Treasury yields also fell.

“We saw a disastrous Philly Fed and jobless claims continuing to head higher, so the economy is weakening, some parts more than others,” Edward Moya, senior market analyst at OANDA, told Reuters.

“For gold to make that run back to record highs, you need the June rate hike completely off the table,” Moya added.

Markets are pricing in an 88% chance of a 25 basis-point hike in May, which a Reuters poll found would be the final one, with the Fed holding rates steady for the rest of 2023.

“This week has had some aggressive Fed speak from its speakers and a continuation of that narrative could give the greenback a boost, leaving gold exposed on the downside,” DailyFX analyst Warren Venketas wrote in a note.

(With files from Reuters)