Gold Settles Higher As Rate Hike Concerns Ease

(RTTNews) - Gold futures jumped to end at a near three-week high on Thursday, with investors opting for its safe haven appeal with U.S. equity markets dropping significantly. The precious metal also found support amid easing concerns of an immediate rate hike by the U.S. Federal Reserve following the release of its March meeting minutes, and the dollar weakening against a basket of major currencies.

Policy makers at the Federal Reserve were worried the public would overreact to new projections for tightening interest rates, according to minutes of their March 19 meeting. The Fed has since assured that rates will remain low for some time.

In economic news, first-time claims for U.S. unemployment benefits dropped much more than expected in the week ended April 5, a report from the Labor Department showed Thursday, with jobless claims falling to their lowest level in almost seven years.

Nonetheless, China's exports and imports declined unexpectedly in March, adding to evidence that suggests that the economy is struggling to achieve its targeted growth.

Gold for June delivery, the most actively traded contract, jumped $14.60 or 1.1 percent to close at $1,320.50 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for April delivery scaled an intraday high of $1,324.90 and a low of $1,311.00 an ounce.

Yesterday, gold ended lower on developments in Ukraine continuing to create anxiety despite the dollar trending lower.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 806.48 tons on Thursday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.38 on Thursday, down from its previous close of 79.53 late Wednesday in North American trade. The dollar scaled a high of 79.57 intraday and a low of 79.33.

The euro traded higher against the dollar at $1.3889 on Thursday, as compared to its previous close of $1.3855 late Wednesday in North America. The euro scaled a high of $1.3900 intraday and a low of $1.3836.

In economic news from the U.S., the Labor Department said initial jobless claims dropped to 300,000 in the week ended April 5, a decrease of 32,000 from the previous week's revised figure of 332,000. Economists expected jobless claims to edge down to 320,000 from the 326,000 originally reported for the previous week. With the bigger than expected decrease, jobless claims fell to their lowest level since hitting 297,000 in the week ended May 12, 2007.

A separate report from the Labor Department showed that import prices in the U.S. rose by a more than expected 0.6 percent in March, after climbing 0.9 percent in February. Meanwhile, export prices rose 0.8 percent in March following a revised 0.7 percent increase in the previous month.

China's shipments dropped 6.6 percent year-over-year in March, confounding expectations for a 4.8 percent increase. However, the rate of decline slowed from the 18.1 percent slump in February, figures from the General Administration of Customs showed Thursday. Export figures for March were largely distorted by a strong base comparison last year. Suggesting weak domestic demand, China's imports dipped 11.3 percent, reversing the 10.1 percent growth seen in February and in contrast to the 3.9 percent rise forecast by economists.

The Chinese trade balance showed a surplus of $7.7 billion in March, larger than the $1.8 billion surplus expected by economists. In February, the balance revealed a huge $22.9 billion deficit.