Investing.com - Gold prices pared gains after better-than-expected U.S. economic data dented expectations for more aggressive policy easing from the Federal Reserve.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange, were little changed, up just 35 cents to $1,423.95 a troy ounce by 9:04 AM ET (13:04 GMT). Bullion had been trading at $1,431.40 ahead of the data.
New orders for durable goods rose by more than double forecasts in June. Core capital goods orders also beat by much more than expected, suggesting that business spending on equipment was picking up after it had contracted in the January to March quarter for the first time in three years.
This sign of recovery provides optimism over business investment that has been one of the factors flagged by the Federal Reserve of key concern for contributing to risks of an economic slowdown.
In other data released at the same time, weekly jobless claims rose less than expected in a continued sign of strength for the U.S. labor market.
Markets have fully priced in a quarter-point reduction in interest rates at the July 31 Fed decision, but expectations for a full 50 basis point cut slipped after the data to 23.5% from 26.5% ahead of the release.
The prospect of lower interest rates benefits non-yielding bullion.
Supporting gold prices however, the European Central Bank opened the door to interest rate cuts and a raft of further measures to ease monetary policy in September. Although no move was made to interest rates in Thursday’s policy meeting, the ECB made substantial changes to its forward guidance, paving the way for action to be taken at its September policy decision.
Central banks worldwide have been sending dovish signals in an effort to combat concerns of a global slowdown as ongoing trade conflicts run the risk of denting the world economy.
Australian central bank chief Philip Lowe said overnight that it was “reasonable to expect an extended period of low interest rates”, just under a month after cutting them to a record low.
Turkey’s central bank delivered the biggest interest-rate cut, 425 basis points, since a shift to targeting inflation back in 2002.
Critics of that decision suggested that the new governor, Murat Uysal, may risk putting his credibility on the line by attempting to satisfy Turkish President Recep Tayyip Erdogan’s desire for lower borrowing costs. Turkey’s Monetary Policy Committee said the move was due to “weaker global economic activity and heightened downside risks to inflation”.
In other metals trading, silver futures fell 0.7% at $16.512 a troy ounce by 9:07 AM ET (13:07 GMT).
Palladium futures lost 0.8% to $1,526.15 an ounce, while sister metal platinum dropped 0.3% to $878.40.
In base metals, copper traded up 0.4% to $2.722 a pound.
-- Reuters contributed to this report.