Gold Price News: Gold Stabilises After US Jobless Figures

Gold prices moved a little higher on Thursday, with the market showing signs of stability after coming under downward pressure earlier in the week.

Prices crept higher to $2,630 an ounce by Thursday afternoon, compared with around $2,610 an ounce in late trades on Wednesday. The relative strength came after prices fell sharply earlier in the week, with Tuesday seeing prices fall from $2,652 to $2,605 an ounce.

US initial jobless claims figures on Thursday showed an increase of 258,000 in the week to October 5, above market expectations of 230,000. More people claiming unemployment benefits suggests a weaker labour market, lending further weight to calls for lower borrowing costs, boosting gold.

However, US inflation and core inflation figures also came out on Thursday showing readings slightly above market expectations for September, on a month-on-month and year-on-year basis. Other things being equal, higher US inflation figures indicate a lower chance that the US Fed will cut interest rates further, in a move that is generally bearish for non-interest-bearing gold.

On the technical charts, gold’s three-month uptrend suggests any significant downside moves from here could encounter support at around the $2,500 an ounce level. This level is further strengthened by indicative support at around $2,485 an ounce, based on horizontal support linked to gold’s lows in early September.

Looking ahead, the markets will be watching out for Friday’s US producer price inflation figures for September, for further insight into the path forward for interest rates.