Investing.com - Gold prices inched higher on Thursday, supported by weakness in the U.S. dollar as volumes remained light ahead of Christmas Eve.
Gold for February delivery on the Comex division of the New York Mercantile Exchange eased up $4.80, or 0.45%, to trade at $1,073.10 a troy ounce during U.S. morning hours. A day earlier, gold dipped $5.80, or 0.54%, the second straight daily loss.
Trading volumes are expected to remain light, with much of the Western world already shuttered for the Christmas and year-end holidays. U.S. markets close at 1:00PM ET Thursday, Christmas Eve, and are shut Friday for Christmas Day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.3% at 98.08 during U.S. morning hours. The index, which has fallen back to levels seen before the Federal Reserve raised interest rates on December 17, remains well off last week's two-week high of 99.33.
With the first U.S. rate hike since 2006 out of the way, the focus is now on the pace of future rate increases. The Fed, from its forecasts, is anticipating four rate hikes next year. However, the Fed funds futures currently suggests there will be just two rate increases, in June and December.
The U.S. Department of Labor said Thursday that the number of individuals filing for initial jobless benefits fell by 5,000 to 267,000 last week. First-time jobless claims have held below the 300,000-level for 41 consecutive weeks, which is usually associated with a firming labor market.
Gold is on track to post an annual decline of 10% in 2015, the third yearly loss in a row, as speculation over the timing of a Fed rate hike dominated market sentiment for most of the year. Rising interest rates historically have been bad news for gold, which can't compete with the higher interest rates offered by other assets.
Meanwhile, silver futures for March delivery tacked on 3.3 cents, or 0.23%, to trade at $14.32 a troy ounce. Silver is on track to post an annual decline of 8% in 2015.
Elsewhere in metals trading, copper dipped 0.5 cents, or 0.24%, to $2.119 a pound. The red metal is on track to post an annual decline of 26% in 2015 as fears of a China-led global economic slowdown spooked traders and rattled sentiment.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.