08.06.202318:08:00UTC+00Gold Shows Strong Move Back To The Upside On Jobless Claims Data

Following the sharp pullback seen in the previous session, the price of gold showed a significant move back to the upside during trading on Thursday.

Gold for August delivery jumped $20.20 or 1.0 percent to $1,978.60 an ounce after slumping $23.10 or 1.2 percent to $1,958.40 an ounce during Wednesday's session.

The rebound by gold came following the release of a Labor Department report showing a jump in weekly jobless claims, which helped ease concerns about the outlook for interest rates.

The Labor Department said initial jobless claims climbed to 261,000 in the week ended June 3rd, an increase of 28,000 from the previous week's revised level of 233,000.

Economists had expected jobless claims to inch up to 235,000 from the 232,000 originally reported for the previous week.

With the much bigger than expected advance, jobless claims reached their highest level since hitting 264,000 in the week ended October 30, 2021.

While economists noted jobless claims can be volatile around holidays like Memorial Day, the data seems to have added to optimism about the Federal Reserve pausing its interest rate hikes next week.

The Fed, which has previously warned about the impact of labor market tightness, is due to announce its latest monetary policy decision next Wednesday.

The jobless claims data also contributed to a decrease in the value of the U.S. dollar, making gold less expensive for other currency holders.