Gold gains as dollar dips
Prices climb as the metal gets cheaper to buy in other currencies.
Updated at 4:40 p.m. ET
Gold prices settled higher Thursday as investors shrugged off signs of a strengthening U.S. economy, focusing instead on a weaker dollar and continued uncertainty in Europe.
Gold (-GC) for April delivery gained $15 to settle at $1,786.30 an ounce at the Comex division of the New York Mercantile Exchange. Gold traded as high as $1,789.50 and as low as $1,773.30 an ounce while the spot price was rising $4.60, according to Kitco's gold index.
Silver (-SI) soared $1.30 to finish at $35.58 an ounce while the U.S. dollar index was down 0.5% at $78.81. As the greenback falls, the dollar-backed metals get less expensive to buy in other currencies, boosting demand.
The Labor Department reported that the number of Americans filing unemployment claims for the first time in the week ended Feb. 18 was unchanged from the previous week's revised figure of 351,000, keeping levels near a four-year low. Economists surveyed by Thomson Reuters had expected claims to rise to 354,000.
The Labor Department added that the four-week moving average fell 7,000 to 359,000 from the previous week's revised average of 366,000.
The report also noted that the number of people continuing to collect jobless benefits fell 52,000 in to 3.39 million in the week ended Feb. 11, from 3.44 million the preceding week.
"Some of this decline may be due to the expiration of benefits rather than previously displaced workers finding new jobs," noted Millan Mulraine, senior U.S. strategist, TD Securities. "Nevertheless, at these levels claims are consistent with the U.S. economy generating at a 200,000-plus pace and as such we expect employment growth in February to fall within this range, suggesting that the labor market is continuing to build on the positive momentum generated over the past two months."
In other domestic economic news, the Federal Housing Finance Agency reported that home prices rose 0.7% on a seasonally-adjusted basis in December, after increasing a revised 0.7% in November. Previously it was reported that prices rose 1% in November.
George Gero, senior vice president with RBC Wealth Management, believes current bullish sentiment behind gold could push prices to $1,800 by June. However, in the near term he expects investors to book some profits ahead of the weekend.
"Continued buying helped by jobs figures today and more buy stops as we are looking at $1,800 as the next possible move before profit taking ensues tomorrow," said Gero.
A research note from RBC Capital Markets said there were few catalysts to trigger movements in any direction. "At the moment, the market is looking for new information as our current state of affairs seems well priced in," said RBC analysts.
Gold mining stocks closed mostly higher Thursday. Randgold Resources (GOLD) finished 1.9% higher at $116.88 while Kinross Gold (KGC) shed 1.1% to end trading at $11.41. Eldorado Gold (EGO) rose 0.7% at $14.88 while Agnico-Eagle (AEM) finished flat at $37.54.
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- Dec gold rose for the first time in six sessions as it gained support from Janet Yellen's speech at the Jackson Hole Symposium. Ms. Yellen said the FOMC sees significant underutilization of labor resources and that the labor market has not fully recovered despite recent gains. The yellow metal advanced to a session high of $1282.80 per ounce and settled with a 0.4% gain at $1280.30 per ounce, booking a 2.0% loss for the week.
- Sep silver touched a session high ... More
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