02:00 PM EDT, 05/09/2024 (MT Newswires) -- (Updates prices.)

Gold traded higher midafternoon on Thursday as the dollar weakened following a report showing U.S. initial jobless claims last week rose to the highest since August, reviving hopes the Federal Reserve will cut interest rates this year.

Gold for June delivery was last seen up US$17.90 to US$2,340.20 per ounce.

The rise comes after the U.S. Labor Department reported 231,000 new jobless claims last week, above expectations for 214,000 new claims according to Marketwatch.

A slowing labor market may be a sign the U.S. economy is cooling, easing inflationary pressure and increasing the chance for a Fed rate cut before the end of the year. The CME Fedwatch tool is expecting the first cut to rates in December.

The ICE dollar index was last seen down 0.26 points to 105.26.

Treasury yields weakened, bullish for gold since it pays no interest. The US two-year note was last seen paying 4.82%, down 2.5 basis points, while the yield on the 10-year note was down 1.8 basis points to 4.464%.