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Gold Futures Settle Notably Lower

Gold prices fell sharply on Thursday after two consecutive days of gains, as risk sentiment improved amid hopes about the reopening of economies and on optimism a COVID-19 vaccine will help halt the economic downturn sooner than later.

Better than expected economic data and the dollar's strength also weighed on the precious metal.

The dollar index rose to 99.51 in late morning trades, but gave up some gains subsequently. It was last seen at 99.34, up 0.2% from the previous close.

Gold futures for June ended down $30.20, or about 1.7%, at $1,721.90 an ounce, the lowest close since May 13.

Silver futures for July shed $0.667, or 3.7%, at $17.364 an ounce, while copper futures for July declined $0.0280, or 1.1%, to $2.4320 per pound.

In the U.S., all 50 states have at least partially eased tight restrictions on businesses, despite persistent levels of hospitalizations and/or new coronavirus cases.

There is some optimism as some of the hardest-hit areas, including New York, New Jersey and Washington state, are now showing the sharpest declines in new cases and deaths.

Meanwhile, the minutes from the Fed's latest policy meeting showed that policymakers acknowledged the possibility of further support measures if the economic downturn persists.

Data from the Labor Department this morning showed first-time claims for U.S. unemployment benefits pulled back further off the record high set in late March in the week ended May 16th.

The report said initial jobless claims dropped to 2.438 million, a decrease of 249,000 from the previous week's revised level of 2.687 million.

Economists had expected jobless claims to tumble to 2.400 million from the 2.981 million originally reported for the previous week.

Jobless claims fell for the seventh straight week after reaching a record high of 6.867 million in the week ended March 28th.

A separate report released by the Federal Reserve Bank of Philadelphia showed a slowdown in the pace of contraction in regional manufacturing activity in the month of May.

The Philly Fed said its diffusion index for current general activity climbed to a negative 43.1 in May from a negative 56.6 in April. Economists had expected the index to increase to a negative 41.5.

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