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Gold Steadies After Recent Losses As BoE Signals Rate Hike

Gold inched higher Thursday as the Bank of England warned of U.K. deflation but signaled it will soon hike interest rates.

"Output growth remains solid and domestic demand growth robust," Bank of England Governor Mark Carney said. Deflation brought on by collapsing energy prices is temporary and "the most likely next move in monetary policy is an increase in interest rates," he added.

With the Federal Reserve also expected to raise interest rates and inflation well in check here in the U.S., gold prices have fallen sharply this month.

U.S. gold was up $3 at $1226 an ounce, as traders reacted to the latest economic data from the U.S.

Continuing to rebound from a recent pullback, first-time claims for U.S. unemployment benefits unexpectedly climbed back above the 300,000 level in the week ended February 7th.

The Labor Department released a report on Thursday showing that initial jobless claims climbed to 304,000, an increase of 25,000 from the previous week's revised level of 279,000.

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