Gold prices rebounded strongly on Thursday following higher than expected US jobless claims data, which led markets to scale back expectations of further interest rate hikes by the Federal Reserve this year.

Spot gold rose 1.1% to $1,986 per ounce, recouping some of the losses seen earlier this week. The gains came after weekly jobless claims rose more than forecast, providing further evidence that the world’s largest economy is slowing down.

The data cemented beliefs that the Fed will now likely pause its aggressive rate hike cycle at the December policy meeting after back-to-back 75 basis point increases over recent months.

Markets are currently pricing in a near 100% probability that rates will be left unchanged next month, according to the CME FedWatch tool.

The shift makes non-yielding bullion more attractive, with the dollar index slipping 0.3% while benchmark 10-year Treasury yields also declined.

Analysts said the charts have also turned more bullish for gold prices. However, gains could be capped by any unexpected tightening by the Fed if upcoming US economic data remains robust.

The yellow metal rose over 7% in October amid safe-haven demand triggered by geopolitical tensions in the Middle East.