2019.06.2014:50:00UTC+00Gold Logs Biggest Single Session Gain In 3 Years, Settles At Over 5-year High

Gold futures soared on Thursday and recorded their highest settlement since September 2013, with traders rushing for the asset after the U.S. Federal Reserve came out with a dovish statement about its future policy that hinted at rate cuts next year, and on an escalation in geopolitical tensions.

Expectations of more stimulus from central banks across the globe contributed as well to the yellow metal's record surge.

The dollar weakened against some major currencies. The dollar index dropped to a low of 96.57, losing nearly 0.6%.

Gold futures for August ended up $48.10, or about 3.6%, at $1,396.90 an ounce, recording their biggest single-session gain in absolute terms and on percentage basis as well, in three years.

Silver futures for July ended up $0.534, at $15.492 an ounce, while Copper futures for July settled at $2.7120 per pound, gaining $0.0315 for the session.

Middle East tensions flared after a U.S. military surveillance drone was shot down by Iranian forces while flying over the Strait of Hormuz.

Iran's elite Revolutionary Guard force said it had shot down an "intruding American spy drone". U.S. officials said the drone was in international territory at the time.

On Wednesday, the Federal Reserve left interest rates unchanged as widely expected but signaled that the next change in interest rates is likely to be a rate cut.

While the Fed did not provide a specific time frame for lowering rates, CME Group's FedWatch Tool shows the markets are pricing in a rate cut at the next monetary policy meeting in late July.

The FedWatch Tool currently indicates a 63.6% chance for a 25 basis point rate cut and a 36.4% chance for a 50 basis point rate cut.

In U.S. economic news today, the Philadelphia-area manufacturing activity was nearly stagnant in the month of June, according to a report released by the Federal Reserve Bank of Philadelphia.

The Philly Fed said its index for current general activity tumbled to 0.3 in June from 16.6 in May.

A report released by the Labor Department showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended June 15th.

The report said initial jobless claims dipped to 216,000, a decrease of 6,000 from the previous week's unrevised level of 222,000. Economists had expected jobless claims to edge down to 220,000.