Gold futures hit session lows after upbeat U.S. jobless claims data

Investing.com - Gold prices fell to the lowest levels of the session on Thursday, after data showed that the number of people who filed for unemployment assistance in the U.S. last week rose less than expected, holding near the lowest level since 2000.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery shed $8.70, or 0.73%, to trade at $1,181.60 a troy ounce during U.S. morning hours after hitting a session low of $1,178.00.

A day earlier, gold dipped $2.90, or 0.24%, to close at $1,190.30. Futures were likely to find support at $1,168.40, the low from May 1, and resistance at $1,199.30, the high from May 5.

Also on the Comex, silver futures for July delivery dropped 23.3 cents, or 1.41%, to trade at $16.27 a troy ounce. On Wednesday, silver slumped 7.3 cents, or 0.44%, to end at $16.50.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits rose by 3,000 to 265,000 last week from the previous week’s total of 262,000, which was the lowest in 15 years. Analysts had expected initial jobless claims to rise by 18,000 to 280,000 last week.

The U.S. dollar found support following the upbeat data. The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.35% to trade at 94.53 early Thursday, after hitting an overnight low of 93.98.

Investors now turned their attention to Friday’s U.S. employment report for further indications on the strength of the economy and the timing of a U.S. rate increase. The data was forecast to show a gain of 224,000 jobs in April, following an increase of just 126,000 in March.

A strong U.S. nonfarm payrolls report was likely to bring forward expectations on when the central bank will begin to raise rates, while a weak number could weigh on the dollar by undermining the argument for an early rate increase.

Recent economic reports have indicated that the economy has slowed since the start of the year prompting many investors to push back expectations on the timing of an initial rate hike by the Federal Reserve.

A drop in global government bond prices also weighed on gold. Germany's 10-Year bond yield hit a fresh 2015 high on Thursday, while the U.S. 10-Year Treasury yield rose to a two-month peak.

Higher bond yields dampen gold's appeal as the precious metal does not pay any interest.

Euro zone and U.S. bond yields have been rising in recent sessions as deflation fears have eased amid recovering oil prices and following the introduction of the European Central Bank's massive quantitative easing program.

Elsewhere in metals trading, copper for July delivery inched down 0.8 cents, or 0.28%, to trade at $2.918 a pound. Copper lost 0.9 cents, or 0.31%, on Wednesday to settle at $2.926.

Prices remained supported amid mounting speculation policymakers in China will have to introduce further stimulus measures to jumpstart the economy amid lackluster growth.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.