Gold Futures Settle Sharply Higher As Dollar Slips On Weak Economic Data

Gold prices surged higher on Thursday as the dollar shed ground against most of its major counterparts after data showing an unexpected drop in U.S. producer prices in March raised expectations the Federal Reserve will soon end its tightening cycle.

Warnings of a rising risk of U.S. recession also boosted safe-haven demand for bullion.

According to minutes of the Fed’s March meeting released on Wednesday, Federal Reserve economists predict that turmoil after the collapse of several banks will cause a “mild recession” later this year.

The dollar index dropped to 100.85 this morning, and continued to stay weak. It is currently hovering around 100.95, down more than 0.5% from the previous close.

Gold futures for June ended higher by $30.40 or about 1.5% at $2,055.30 an ounce.

Silver futures for May ended up $0.467 at $25.925 an ounce, while Copper futures for May settled at $4.1240 per pound, gaining $0.0430.

Data from the Labor Department showed that the producer price index fell by 0.5% in March following a revised unchanged reading in February. Economists had expected producer prices to come in unchanged compared to the 0.1% dip originally reported for the previous month.

The report also showed the annual rate of producer price growth slowed dramatically to 2.7 in March from 4.9% in February. Economists had expected the pace of growth to slow to 3%.

Separate data showed that first-time claims for U.S. unemployment benefits rose more than expected in the week ended April 8, climbing to 239,000, an increase of 11,000 from the previous week’s unrevised level of 228,000. Economists had expected jobless claims to rise to 232,000.

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