NEW YORK—Gold futures fell more than $40 Thursday to their lowest level in three months as investors move out of riskier assets on concerns about euro-zone debt and weaker-than-expected U.S. weekly jobless figures.
In recent trading, April gold, the most active contract, was down $35.10, or 3.2%, at $1,076.90 an ounce on the Comex division of the New York Mercantile Exchange. The contract dipped as far as $1,065.20, its lowest point since Nov. 3.
Participants are selling the euro, gold, other commodities and equities on worries about Greece's budget deficit as well as concerns about Spain's and Portugal's sovereign finances.
"That is sucking risk appetite out," said Stephen Platt, analyst with Archer Financial Services. "The economic recovery is still kind of touch-and-go."
News that the U.S. Labor Department reported that initial claims for jobless benefits grew by 8,000 last week also dented investor tolerance for risk. Economists had forecast the number of claims to decline by 10,000.
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The increase in risk aversion is giving a boost to the dollar as a safe haven. The ICE Futures U.S. Dollar Index was up 0.501 point, or 0.6%, at 79.873 points.
A stronger dollar often hurts dollar-denominated metals like gold by making them more expensive in other currencies.
Markets are concerned that Greece's sovereign debt issues could spread to other euro zone members, hitting the common currency.
The cost of insuring Portugal's sovereign debt rose Thursday after the Portuguese government sold only €300 million ($417 million) of treasury bills at an auction Wednesday, compared with an indicative offer of €500 million. The cost of insuring Spain and Greece's debt also rose.
European Central Bank President Jean-Claude Trichet's comments Thursday that the ECB is "confident" that Greece will take all the steps needed to reduce its budget deficit to a sustainable level didn't reassure markets.
The market also is cautious ahead of U.S. payrolls data due out Friday, Archer Financial's Mr. Platt said. Friday's January payrolls report is expected to show that the economy neither lost nor gained jobs in the first month of the new year.
