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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.”
Read:Fed unanimously adopts new strategy, widely seen as leading to easier policy
“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.”
December gold GCZ20, -0.07% GC00, -0.07% 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.
September silver SIU20, -0.57%, 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%.
