Askume, Sept 12 – Gold prices rose more than 1% on Thursday, hitting a record high as U.S. data showed an economic slowdown and the Federal Reserve will cut interest rates next week.
Spot gold was up 1.7% at $2,554.05 per ounce by 02:10 ET (1810 GMT). US gold futures rose 1.5% to $2,580.60.
Initial jobless claims rose by 2,000 to a seasonally adjusted 230,000, the Labor Department said .
US producer prices rose slightly more than expected in August due to rising service costs , but the trend continued as inflation slowed.
Alex Abkarian, chief operating officer at Allegiance Gold, said: “We are moving into a low interest rate environment, so gold has become more attractive… I think we are more likely to see a significant rate cut rather than ‘make a lot more money’.
According to the CME FedWatch tool, the market is currently pricing in a 73% chance of a 25 basis point rate cut and a 27% chance of a 50 basis point rate cut by the Federal Reserve at its September 17-18 meeting.
Zero-yielding gold bars are a preferred investment in a low-interest rate environment.
“The labor market remains tight, and if the labor market continues to deteriorate, their journey to cut rates will be longer,” said Phillip Strible, chief market strategist at Blue Line Futures.
Elsewhere, palladium rose 4.1% to $1,050 per ounce, its highest level in more than two months.
Russian President Vladimir Putin said on Wednesday that MoscowRestrictions on the export of uranium, titanium, and nickel should be considered in retaliation against the West .
“The palladium market is ripe for short covering, but because the metal is a by-product of Russian nickel production, such export restrictions could lead to lower production,” said Nitish Shah, commodity strategist at WisdomTree.
Spot silver rose 3.7% to $29.76 and platinum gained 3% to $979.62, hitting a new high in nearly two months.
