MW: Gold falls from record highs on stronger dollar, jobs data
NEW YORK (MarketWatch) -- Gold futures fell Thursday, pulling back from their record highs above $1,150 an ounce, as souring sentiment over U.S. economic prospects lifted the U.S. dollar, reducing gold's appeal as a hedge against a weaker currency.
Among the latest U.S. data weighing on stocks and the dollar, jobless claims rose slightly more than expected last week, an index of leading economic indicators rose at a smaller-than-expected pace and foreclosures rose to a record.
Gold for December delivery, the most actively traded contract, slid $6.60, or 0.6%, to $1,134.60 an ounce. It rose as high as $1,151.20 Wednesday.
The thinly traded November contract lost $5.20, or 0.5%, to $1,135.50 an ounce, after closing above $1,140 in the previous session. The contract is up more than 9% so far this month.
Gold fell on "the stronger dollar and we will wait to see if this is the start of a larger dollar correction or just another dip buying opportunity," said James Moore, an analyst at TheBullionDesk.com "Given the scale of gains added recently [in gold], a correction would be beneficial."
The number of people filing initial claims for state unemployment benefits was unchanged from a week ago, standing at a seasonally adjusted 505,000 in the week ended Nov. 14, the Labor Department reported Thursday.
Initial claims are at the lowest level since early January, but they have hovered above 500,000 for 53 straight weeks, contributing to a 26-year high in the U.S. unemployment rate at 10.2%. See story on jobless claims.
The index of leading indicators rose 0.3% in October after a 1% gain in September, the private Conference Board said. Economists surveyed by MarketWatch expected the leading index to rise 0.4%.
In currencies trading, the dollar rebounded against most of its rivals, with the dollar index (DXY 75.47, +0.28, +0.38%) up 0.3% at 75.455. A stronger dollar tends to add downward pressures on dollar-denominated commodities prices.
Also weighing on commodities and lifting the dollar overnight were concerns about banks and a property asset bubble in China. "A large bubble is forming in China's property market as a result of Beijing's credit-driven stimulus program," said Zhang Xin, a prominent developer, told the Financial Times.
Gold demand for the third quarter reached 800.3 metric tons, or $24.7 billion in dollar terms, up 15% from the second quarter, the World Gold Council reported Thursday.
Demand for gold exchange-traded funds dipped, but jewelry, industrial and retail investment demand rose.
Comparing with a year ago, however, demand dropped 34% due to "an exceptionally strong" third quarter in 2008 in response to the financial crisis, the WGC, a gold mining industry group, said.
Average gold prices stood at $960 an ounce in the third quarter, up 10% from a year ago, the WGC said.
In gold exchange-traded funds, SPDR Gold Shares (GLD 111.58, -0.67, -0.60%) , the biggest gold ETF, rose to 1,117.49 metric tons as of Wednesday, up 3.66 metric tons from a day ago.
In other metals trading, December silver lost 0.7% to $18.29 an ounce, December palladium dropped 2% to $366.80 an ounce, and January platinum fell 1% to $1,436.50 an ounce.
