Gold Futures Settle At 2-week High

Gold prices moved higher on Thursday to settle at 2-week high, with global central banks set to continue with their monetary easing stance to boost growth.

The European Central Bank today left its key interest rates, forward guidance, and stimulus measures unchanged as expected in the final policy session chaired by President Mario Draghi.

The Federal Reserve is widely expected to cut interest rate by 25 basis points when it next meets to review its policy stance on October 29 and 30.

Markets are rife with speculation the Bank of Japan could ease its policy at its Oct. 30-31 rate review.

Despite the dollar’s rise, gold futures ended stronger today. The dollar index rose to 97.78 and was last seen hovering around 97.65, as compared to previous close of 97.49.

Gold futures for December ended up $9.00, or about 0.6%, at $1,504.70 an ounce, the highest settlement in about two weeks.

On Wednesday, gold futures for December ended up $8.20, or about 0.6%, at $1,495.70 an ounce.

Silver futures for December ended up $0.224 at $17.804 an ounce, while Copper futures for December settled at $2.6680 per pound, down $0.0035 from previous close.

The ECB’s main refinancing rate was retained at its record low 0% and the deposit rate at -0.5% after the latest Governing Council meeting. The latter was slashed by 10 basis points in September.

The marginal lending facility rate was kept unchanged at 0.25%.

The bank also retained its forward guidance on both interest rates and asset purchases.

U.S. economic data, including a report from the Commerce Department showing a steep drop in orders for transportation equipment contributed to a bigger than expected decrease in durable goods orders in the month of September.

The Commerce Department said durable goods orders tumbled by 1.1% in September after rising by a revised 0.3% in August.

Economists had expected durable goods orders to decline by 0.8% compared to the 0.2% uptick that had been reported for the previous month.

Excluding the nosedive in orders for transportation equipment, durable goods orders dipped by 0.3% in September after climbing by 0.3% in August. Ex-transportation orders had expected to edge down by 0.2%.

A separate report from the Commerce Department showed new home sales pulled back in September after a sharp increase in the previous month.

The report said new home sales slid by 0.7% to an annual rate of 701,000 in September after spiking by 6.2% to a revised rate of 706,000 in August.

Economists had expected slump by 1.7% to a rate of 701,000 from the 713,000 originally reported for the previous month.

Meanwhile, the Labor Department released a report showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended October 19th.

The report said initial jobless claims dipped to 212,000, a decrease of 6,000 from the previous week’s revised level of 218,000.

Economists had expected jobless claims to inch up to 215,000 from the 214,000 originally reported for the previous week.

Meanwhile, the euro area private sector remained close to stagnation in October as manufacturing continued to shrink amid subdued expansion in services activity, survey data from IHS Markit showed.

The material has been provided by InstaForex Company – www.instaforex.com