Gold futures turned higher Thursday morning as Federal Reserve Chairman Jerome Powell announced changes to the central bank’s policy framework in a speech at the Jackson Hole economic symposium that were perceived as more accommodative, and bullish for bullion buyers.
In a statement, the Fed said that it has adopted an “average inflation target” and recognizes the benefits for a strong labor market. The Fed’s strategy retains 2% annual growth of inflation as a target but the Fed said it “seeks to achieve inflation that averages 2% over time.”
“I think Powell and other central bank heads at the Jackson Hole Symposium are likely to reaffirm their commitment for running [quantitative easing] at full throttle for a while yet,” wrote Fawad Razaqzada, market analyst at ThinkMarkets, in a Thursday research report. “If so, this should keep gold supported and keep the pressure on the dollar.”
traded $10.50, or 0.5%, higher at $1,963 an ounce, after rising 1.5% in the previous session, helping the commodity finish at around a one-week high. Gold prices did hit an intraday peak at $1,987 an ounce before pulling back.
meanwhile, picked up 17 cents, or 0.6%, at $27.62 an ounce, after surging 4.4% on Wednesday, also marking its highest settlement in about a week.
Meanwhile, a report on new applications for jobless benefits fell again in late August to just a hair above 1 million and resumed a downward trend, perhaps signaling the resumption of a gradual if painfully slow recovery in the U.S. labor market.
Initial jobless claims, a rough gauge of layoffs, declined by 98,000 to 1 million from 1.1 million in the prior week, the Labor Department said Thursday. Meanwhile, a historic decline in U.S. 2nd-quarter gross domestic product was revised to 31.7% annual rate from 32.9%.