WASHINGTON (dpa-AFX) - Gold futures settled higher on Thursday, extending gains to a third straight session, amid optimism about more interest rate cuts by the Federal Reserve. Investors also cheered another interest rate cut by the European Central Bank (ECB) and data showing a drop in eurozone inflation.
Once again, gold prices moved higher despite a firm dollar. The dollar index climbed to 103.84, gaining nearly 0.25%.
Gold futures for October ended up by $17.00 or about 0.65% at $2,691.00 an ounce.
Silver futures for October closed down $0.187 or nearly 0.6% at $31.573 an ounce, while Copper futures for October dropped to $4.3290 per pound, down $0.0385 or 0.88% from the previous close.
The ECB cut key interest rates by 25 basis points, as expected, as policymakers assessed that the disinflation process is on track, although they are increasingly concerned over the health of the euro area economy following some soft data released since the September policy session.
The Governing Council, led by ECB President Christine Lagarde, lowered the deposit facility rate by a quarter basis point to 3.25% following the rate-setting session held in Ljubljana, the capital of Slovenia.
Data from the Commerce Department showed retail sales rose by 0.4% in September after edging up by 0.1% in August. Economists had expected retail sales to rise by 0.3%. Excluding sales by motor vehicle and parts dealers, retail sales climbed by 0.5% in September after rising by 0.2% in August. Ex-auto sales were expected to inch up by 0.1%.
A separate report released by the Labor Department showed an unexpected pullback by first-time claims for U.S. unemployment benefits in the week ended October 12th. The report said initial jobless claims fell to 241,000, a decrease of 19,000 from the previous week's revised level of 260,000.
Economists had expected jobless claims to inch up to 260,000 from the 258,000 originally reported for the previous week.
Meanwhile, the Federal Reserve released a report showing industrial production in the U.S. fell by slightly more than expected in the month of September, decreasing by 0.3%, after rising by a downwardly revised 0.3% in August. Economists had expected industrial production to dip by 0.2% compared to the 0.8% increase originally reported for the previous month.
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