Investing.com - Gold prices extended gains to a five-week high on Thursday, after data showed that the number of people who filed for unemployment assistance in the U.S. rose unexpectedly last week.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose to an intraday peak of $1,143.40 a troy ounce, the strongest level since July 17, before trading at $1,142.40 during European morning hours, up $14.50, or 1.29%.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits rose by 4,000 last week to 277,000 from the previous week’s total of 273,000. Analysts had expected initial jobless claims to fall by 1,000 to 272,000 last week.
A day earlier, gold climbed $11.00, or 0.98%, to close at $1,127.90 after prospects for a rate hike in September by the Federal Reserve appeared dim after the release of July meeting minutes.
Minutes of the Fed's July meeting published on Wednesday showed that policymakers express broad concerns about lagging inflation and the weak global economy, leading some investors to question the likelihood of a rate hike in September.
According to the minutes, Fed officials were concerned about "recent decreases in oil prices and the possibility of adverse spillovers from slower economic growth in China."
The dovish minutes prompted investors to push back expectations on the timing of an initial rate hike by the Fed to December, instead of September.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
Some traders believe the Fed could postpone raising interest rates next month as officials are likely to remain concerned over global growth and inflation pressures due to China’s shock currency devaluation move and weak commodity prices.
Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006. But prices have since rebounded almost 6% on hopes of a delayed U.S. rate hike.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
The US dollar index, which tracks the greenback against a basket of six major rivals, was down 0.25% to 96.18, after falling sharply on Wednesday, as investors pushed back expectations on the timing of an initial rate hike by the Federal Reserve to December, instead of September.
Elsewhere in metals trading, copper for September delivery on the Comex division of the New York Mercantile Exchange jumped 4.0 cents, or 1.75%, to trade at $2.316 a pound during morning hours in New York.
Copper plunged to $2.260 on Wednesday as growing concerns over the health of China's economy and steep declines on Chinese stock markets dampened appetite for the red metal.
The Shanghai Composite took investors on another volatile ride on Thursday, falling by as much as 2.2% after the open, before paring losses after the midday break, and then plunging again in the last hour of trade to end down 3.4%.
Chinese stock markets sold off sharply earlier in the week amid growing concerns over the health of the Asian nation's economy and worries that Beijing may allow the yuan to continue to depreciate, fueling fears over a currency war that could destabilize the global economy.
Market players are also concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for the industrial metal will decline.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.