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Key Takeaways
- The spot gold price advanced Thursday as a bigger-than-expected jump in weekly unemployment claims raised optimism about potential Federal Reserve interest rate cuts.
- The Bank of England suggested it is moving closer to lowering rates, and Sweden’s central bank made its first cut since 2016.
- Strong export data from China also helped boost gold prices.
The spot price of gold rose 1.4% to $2,339.76 as of 3:35 p.m. ET Thursday as a rise in weekly jobless claims raised optimism the labor market will slow enough to allow the Federal Reserve to cut interest rates.
Higher-Than-Expected Weekly Jobless Claims
The Labor Department reported initial unemployment claims totaled a seasonally adjusted 231,000 for the week ending May 4, an increase of 22,000 from the previous week and above forecasts. That followed last week’s report on April job creation showing employers added fewer job than expected last month, raising hopes that a slowdown in the labor force could push the Fed toward lowering interest rates, which would be bullish for gold.
Bank of England, Riksbank Interest Rate Moves
Meanwhile, other central banks gave encouraging signs about lower borrowing costs. The Bank of England (BoE) held interest rates steady, but gave indications that policymakers were closer to cutting them. Yesterday, Sweden’s central bank, the Riksbank, reduced rates for the first time since 2016.
China’s Export Growth Helps Fuel Gold Price Gains
Gold also got a boost from a positive report on the Chinese economy, which posted stronger-than-expected exports last month. China is a key player in the gold market, with the World Gold Council noting it was one of the biggest government buyers of gold in the first quarter.
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