Gold Futures Recover After Sharp Fall, Settle Flat As Dollar Drifts Lower

After falling sharply following data showing a bigger than expected increase in U.S. consumer prices in the month of September, gold futures recovered well as the session progressed on Thursday and settled flat.

The data from the Labor Department showed consumer prices in the U.S. rose by more than expected in September, raising concerns about the outlook for interest rates. The data said the consumer price index rose by 0.4% in September after inching up by 0.1% in August. Economists had expected consumer prices to edge up by 0.2%.

The dollar’s sharp retreat contributed to gold’s recovery from the day’s lows. The dollar index, which climbed to 113.92 after the data on consumer price inflation, fell sharply and was last seen at 112.20, down nearly 1% from the previous close.

The dollar fell and gold prices recovered, probably on hopes inflation may have peaked and markets have already priced in another aggressive interest rate hike by the Federal Reserve.

Gold futures for December settled at $1,677.00 an ounce, down $0.50 from the previous close, recovering from a low of $1,648.30.

Silver futures for December ended down $0.020 at $18.918 an ounce, while Copper futures for December settled at $3.4405 per pound, gaining $0.0155.

Another report from the Labor Department showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 8th.

The data said said initial jobless claims rose to 228,000, an increase of 9,000 from the previous week’s unrevised level of 219,000. Economists had expected jobless claims to inch up to 225,000.

The report showed the less volatile four-week moving average also crept up to 211,500, an increase of 5,000 from the previous week’s unrevised average of 206,500.

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