MW: Gold falls for second day after U.S. jobless-claims data
NEW YORK (MarketWatch) -- Gold futures fell Thursday for a second session, continuing to pull back from the $1,000-an-ounce level as U.S. weekly jobless-claims data reduced the metal's safe-haven appeal.
The Labor Department's report came in slightly better than expected: The number of people filing for initial unemployment benefits fell to a seasonally adjusted 550,000 last week, the lowest since mid-July. Economists surveyed by MarketWatch had expected claims to stand at 558,000. See Economic Report.
Cushioning gold's losses, the U.S. dollar gave ground against most rival currencies. The dollar index (DXY 76.95, -0.14, -0.18%) fell 0.2% to 76.913. See Currencies.
The thinly traded September gold futures contract lost $2.30, or 0.2%, to $993 an ounce on the Comex division of the New York Mercantile Exchange. December gold futures, the most actively traded contract, sank $1, or 0.1%, to $996.10 an ounce.
"Despite the U.S. dollar falling further, gold traded lower as profit taking emerged," said James Moore, analyst at TheBullionDesk.com.
However, he predicted that gold will "make further tests higher in the coming sessions as increasingly bearish dollar sentiment prompts diversification toward commodities, equities and better-yielding currencies."
The September gold contract on Tuesday topped $1,000 an ounce to hit the highest level in 18 months. The December contract had rallied 9% in the four sessions ended Tuesday.
"Investor reactions to the ongoing economic crisis are the dominant influence on gold prices and the central factor behind the current rally to $1,000 an ounce," said James Steel, precious metals analyst at HSBC, in a note, adding that gold also has been drawing buyers as "a potential inflation hedge."
Holdings in SPDR Gold Trust (GLD 97.41, +0.33, +0.34%) , the biggest gold exchange-traded fund, stood at 1,077.63 metric tons Wednesday, unchanged for a third session.
"Gold prices will be determined by the interplay between inflationary expectations, safe-haven demand, mine supply, jewelry demand and scrap supplies," said Steel. He predicts gold prices on average will stand at $925 an ounce this year and $950 an ounce next year.
In other metals action, December silver futures traded virtually flat at $16.46 an ounce. October platinum lost $1.40, or 0.1%, to $1,290.10 an ounce, while December palladium dropped $1.05, or 0.4%, to $294 an ounce.
December copper futures dropped 6.4 cents, or 2.2%, to $2.86 a pound.
