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Gold Prices Hit 2-Week Highs as Dollar Retreats

Gold Prices Hit 2-Week Highs as Dollar Retreats© Reuters. Gold prices hit 2-week highs as dollar retreats

Investing.com – Gold prices rose to the highest levels in two weeks on Thursday as the dollar retreated from four-and-a-half month highs as tame U.S. inflation data indicated that the Federal Reserve will stay on track with gradual rate hikes this year.

for June delivery on the Comex division of the New York Mercantile Exchange rose $9.10 or 0.69% to $1,322.00 a troy ounce by 09:26 AM ET (13:26 GMT), the highest level since April 25.

The , which measures the greenback’s strength against a basket of six major currencies, was down 0.52% to 92.47, pulling away from Wednesday’s four-and-a-half month high of 93.26.

A softer dollar tends to boost demand for gold and other dollar-denominated commodities, making them less expensive for overseas buyers.

The dollar weakened after the Labor Department reported that rose 2.5% in April, in line with forecasts, but monthly inflation rose by a smaller-than-expected 0.2%.

Core, or underlying inflation rose by 2.1% last month and was up 0.1% from a month earlier.

The data indicated that the Fed would stick to plans for two additional rate hikes this year, but tempered expectations for a more aggressive pace of monetary tightening.

At the same time, another report showed that held at 211,000 last week, close to an almost 48 year low, pointing to continued strength in the labor market.

The dollar has been boosted in recent sessions by rising U.S. yields and the prospect of a faster pace of rate hikes by the U.S. central bank this year.

Expectations of higher interest rates make the dollar more attractive to investors seeking yield.

In other precious metal trade, were up 1.25% to $16.74, while climbed 0.85% to $924.40.

Among base metals, advanced 1.72% to trade at $3.111 a pound.

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Source: Investing.com

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