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Gold Futures Settle At 7-week High As Dollar Tumbles

Gold prices rose sharply and hit a seven-week high on Thursday as the dollar weakened and the Bank of England expanded its asset buying program.

The dollar slipped amid hopes the U.S. Government will soon announce a massive stimulus plan.

The dollar index, which tumbled to 92.49 earlier in the day, recovered to 92.70 past noon, but was still down 0.8% from previous close.

Gold futures for December ended up $50.60 or about 2.7% at $1,946.80 an ounce.

Post announcement of Fed policy, gold futures were up at $1,949.80 an ounce.

Silver futures for December closed higher by $1.298 at $25.191 an ounce, while Copper futures for December settled at $3.1100 per pound, up $0.0030 from previous close.

In economic news, the Federal Reserve today left interest rates unchanged at near-zero levels.

The accompanying statement said the Fed expects rates to remain unchanged until labor market conditions have reached levels consistent with the central bank’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.

The Fed also said it plans to increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions.

First-claims for U.S. unemployment benefits showed a modest decrease in the week ended October 31st, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims edged down to 751,000, a decrease of 7,000 from the previous week’s revised level of 758,000. Economists had expected jobless claims to drop to 732,000.

The Labor Department said the less volatile four-week moving average also dipped to 787,000, a decrease of 4,000 from the previous week’s revised average of 791,000.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, tumbled by 538,000 to 7.285 million in the week ended October 24th.

In the U.K., the Bank of England today expanded its asset purchase programme by a more-than-expected GBP 150 billion, rising it to GBP 895 billion, and retained its record low interest rate (0.1%) as the economy entered a second lockdown.

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