Investing.com – Gold prices traded near session highs on Thursday after the minutes of the Federal Reserve’s July meeting showed members were concerned about raising interest rates amid a slowdown in inflation, narrowing investor expectations for a third rate hike later this year.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose $7.66, or 0.59%, to $1,290.51 a troy ounce.
The minutes of the Fed's July 25-26 policy meeting on Wednesday, showed some policymakers believed the Fed could afford to stand pat on further rate increases until it is clear the trend of soft inflation is transitory.
The somewhat dovish minutes, dampened investor expectations of third rate hike later this year, underpinning a move higher in gold futures.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Gold futures, however, struggled to breach $1,300 as initial jobless claims and manufacturing data topped forecasts, lifting sentiment on the strength of the U.S. economy.
Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 232,000 for the week ended Aug. 12, the Labor Department said. That beat economists’ forecasts of a just 4,000 decline.
In a separate report, the Federal Reserve bank of Philadelphia said that its Philly Fed manufacturing index rose to a seasonally adjusted 18.9 for August, compared with consensus estimates of 18.5.
The upbeat economic reports lifted the dollar against its rivals, capping gains in dollar-denominated commodities.
In other precious metal trade, silver futures rose 0.55% to $17.03 an ounce while platinum futures gained 0.45% to $978.90 an ounce.
Copper traded at $2.93, down 0.69%, while palladium futures gained 1.75% to $926.05 after touching $929.50, the highest since February 2001.