Gold Futures Settle Marginally Higher

Gold futures settled higher on Thursday, although the uptick was just marginal as the dollar climbed up amid uncertainty about the outlook for U.S. interest rates.

The European Central Bank today raised its key interest rates for the tenth policy session in a row as rate-setters assessed the euro area inflation to remain “too high for too long.”

However, the ECB signaled a pause, possibly a long one, in the tightening cycle as the bank saw it prudent to guide that the current level of interest rates if maintained for long would ensure a timely return of inflation to the 2% target.

The dollar index climbed to 105.40, gaining about 0.6%.

Gold futures for December ended higher by $0.30 at $1,932.80 an ounce.

Silver futures for December ended down $0.187 at $22.994 an ounce, while Copper futures for December settled at $3.8215 per pound, gaining $0.0285.

In economic news, a Commerce Department report showed retail sales in the U.S. increased by much more than expected in the month of August.

The report said retail sales climbed by 0.6% in August after rising by a downwardly revised 0.5% in July. Economists had expected retail sales to inch up by 0.2% compared to the 0.7% increase originally reported for the previous month.

The bigger than expected increase in retail sales was largely due to higher gas prices, however, as sales rose by just 0.2% excluding sales by gas stations.

A separate report released by the Labor Department showed producer prices in the U.S. increased by more than expected in month of August. The producer price index for final demand advanced by 0.7% in August after climbing by an upwardly revised 0.4% in July.

Economists had expected producer prices to rise by 0.4% compared to the 0.3% increase originally reported for the previous month.

The report also said the annual rate of producer price growth doubled to 1.6% in August from 0.8% in July. The annual rate of growth was expected to accelerate to 1.2%.

“Wall Street seems content with the risk of one more Fed rate hike as consumer resilience is expected to gradually weaken,” said Edward Moya, senior market analyst at OANDA.

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