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Gold closed out Thursday’s session at its lowest level since June 19, as U.S. equities reached a record after data showed jobless claims in the U.S. fell to a 2006 low and global manufacturing increased.
The U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending July 19 declined by 19,000 to 284,000, from the previous week’s total of 303,000. Analysts had expected jobless claims to rise by 5,000 to 308,000.
Gold fell while the dollar rallied on the news, as the data once again revived speculation over the timing of a possible rate hike by the Federal Reserve.
In testimony delivered last week before the Senate Banking Committee, Federal Reserve Chairwoman Janet Yellen stated that U.S. interest rates may have to rise sooner than forecast “if the labor market continues to improve more quickly than anticipated,” adding that the central bank must press on with stimulus because “significant slack” remains.
Meanwhile, continued unrest in Ukraine and the Middle East has failed to attract additional safe-haven bids for gold.
Pro-Russian rebels shot down two Ukrainian fighter jets on Wednesday, not far from where the Malaysian Airlines passenger plane was brought down in eastern Ukraine late last week.
Separately, Ukrainian Prime Minister Arseniy Yatsenyuk announced his resignation on Thursday following turmoil in the government.
Elsewhere, Israel and Hamas are weighing a U.S.-backed proposal for a temporary cease-fire in the Gaza Strip conflict.
In the physical market, meanwhile, gold buying picked up as prices dipped below $1,300; however, demand remained weak in comparison to last year. Data on Thursday showed that China's net overseas gold purchases through Hong Kong fell to a 17-month low in June as a weaker Yuan curbed demand and direct imports via the mainland flourished.
Gold is down roughly 1.4 percent for the week. Silver, platinum and palladium were also headed for weekly losses.
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