Gold stays higher on Thursday, August 18
Gold inched higher on Thursday, August 18, amid a weaker dollar and decreased expectations over a near-term interest rate hike. At 2:40 PM EDT on Thursday, August 18, the COMEX gold futures contract for December contract was trading at $1,357.85 per ounce, a gain of ~0.66%.
This is the highest level at which gold closed since August 4, which makes it a two-week high level. The COMEX silver contract for September was trading at $19.77 per ounce, a gain of ~0.65%.
The chances of interest rate hike by Fed declined
The balanced Federal Reserve minutes from the July meeting were released on Wednesday, August 17. This weakened the US dollar and sent it below seven-week low price levels on August 18. July’s Fed statement showed that the members are divided over the decision to increase interest rates in the near term.
The weaker dollar supports the prices of dollar-denominated commodities like gold and silver. On Thursday, August 18, the chances of an interest rate hike in September, November, and December stands at 9%, 14.7%, and 43.1%, respectively. Please read Why Gold Is Closely Tied to Interest Rates to learn why interest rates impact gold prices.
According to data released by the US Department of Labor, the initial jobless claims in the week ended August 13 fell by 4,000 to 262,000. The Market was expecting a decline in initial jobless claims by 1,000 to 265,000. Although the report was better than expected, gold was trading higher as the odds of an interest rate hike declined.
At 3:00 PM EDT on Thursday, August 18, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) gained ~0.91%, ~0.89%, ~0.92%, and ~1.6%, respectively. The SPDR Gold Trust ETF (GLD) gained 0.5%.