2022.05.0518:16:00UTC+00Gold Futures Settle Modestly Higher On Safe-haven Buying

Gold prices climbed higher on Thursday, as a sell-off in stock markets and a less hawkish tone from the Federal Reserve boosted the demand for the safe-haven yellow metal.

The Dow is plunging 3.25%, while the S&P 500 and the Nasdaq are falling 3.7% and 5.2%, respectively.

The dollar's sharp uptick limited gold's gains. The dollar index, which plunged on Wednesday after Fed chair Jerome Powell ruled out aggressive rate hikes, rebounded today, surging to 103.94, gaining more than 1.3%.

Gold futures for June ended higher by $6.90 or about 0.3% at $1,875.70 an ounce.

Silver futures for July ended up by $0.041 at $22.443 an ounce, while Copper futures for July settled at $4.2915 per pound, down $0.0465 from the previous close.

The Federal Reserve announced a 50-basis point hike in interest rates on Wednesday and signalled another couple of similar hikes in the coming months, but ruled out a more aggressive interest rate hike.

After outlining plans to reduce the Fed's near $9 trillion balance sheet, Fed Chair Jerome Powell said that inflation is flattening out and that the economy is continuing to perform well.

He expressed confidence the U.S. central bank could engineer a "soft landing" that tames inflation without sending the economy into a recession.

Data released by the Labor Department this morning showed initial jobless claims rose to 200,000 in the week ended April 30th, an increase of 19,000 from the previous week's revised level of 181,000. Economists had expected jobless claims to inch up to 182,000 from the 180,000 originally reported for the previous week.

A separate report from the Labor Department said labor productivity plunged by 7.5% in the first quarter, reflecting the largest decline since the third quarter of 1947.

Traders also looked ahead to the release of the Labor Department's closely watched monthly jobs report on Friday.

Economists currently expect employment to jump by 391,000 jobs in April after surging by 431,000 jobs in March, while the unemployment rate is expected to edge down to 3.5% from 3.6%.