Investing.com - Gold prices rose to fresh five-week highs on Thursday following the release of mixed U.S. economic data on jobless claims and producer prices, as the dollar traded at four-month lows.
Gold futures for June delivery hit highs of $1,222.2, the most since April 6, following gains of more than 2% in the previous session.
The greenback remained on the back foot after data showed that U.S. producer prices fell in April, while initial jobless claims unexpectedly fell last week.
The Department of Labor said the number of Americans filing claims for initial jobless benefits in the week ending May 9 fell by 1,000 to a seasonally adjusted 264,000, coming in just above the 15 year low reached two weeks ago, indicating that the recovery in the labor market is continuing.
Analysts had expected jobless claims to increase to 275,000.
In another report, the Labor Department said the producer price index fell 0.4% last month and was 1.3% lower on a year-over-year basis, the largest drop since 2010.
The weak inflation data reinforced expectations that the Federal Reserve will hold off on raising interest rates until the economic recovery is on a stronger footing.
Recent figures showed that the U.S. economy expanded just 0.2% in the first quarter and data on Wednesday showing that U.S. retail sales failed to rise in April disappointed hopes for a rebound in second quarter growth after the sharp slowdown in the first three months of the year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit fresh four-month lows of 93.81 following the economic reports.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Elsewhere in metals trading, silver futures for July delivery jumped 1.36% to $17.45 a troy ounce, while copper for July delivery was up 0.21% to $2.934 a pound.