RTTN: Gold Prices Move Higher After Eight Straight Daily Drops
Gold prices edged higher on Thursday after closing in the red in the previous eight sessions. Traders considered interest rate cuts from the UK and Eurozone as well as the latest employment news.
April gold rallied to $916.20, up $9.50 for the session. Prices jumped as high as $919.20 in the early going.
Before today, gold had lost nearly $100 since closing at an 11-month high of $1,002.20 on Feb. 20. Gold is down more than $30 this week.
The dollar firmed up against the euro and sterling Thursday morning in New York as traders reacted to the latest interest rate decisions from policymakers in the EU and UK. The dollar rose to 1.4040 versus the sterling but quickly returned most of the gains. Versus the euro, the dollar rose to 1.2530, heading back to a multi-month high of 1.2452, set earlier in the week.
As expected, the European Central Bank lowered its key interest rate by half a percent to a record low of 1.5% on Thursday as economic slowdown deepened in the 16-nation economy.
Earlier in the day, the Bank of England lowered its bank rate by 50 basis points to a record low of 0.5% and announced a GBP 75 billion-asset purchase facility to boost money supply and credit and in due course raising the rate of growth of nominal spending.
In other economic news, the U.S. Labor Department reported initial jobless claims were at 639,000 for the week ended Feb. 28. This was down 31,000 from last week's multi-decade high. Economists had expected a more modest decline to a level around 650,000.
Separately, the Labor Department reported that productivity in the fourth quarter was revised to show a 0.4 percent decrease compared to the previously reported 3.2 percent increase. Economists had expected productivity to be revised down to show 1.1 percent growth.
At 10 a.m. ET, Fed Board Vice Chairman Donald Kohn is set to testify before the Senate Banking Committee on the government's aid to AIG. At the same time, Treasury Secretary Timothy Geithner is due to testify before the House Budget Committee on the Treasury Department budget for 2010.
Atlanta Fed President Dennis Lockhart is set to speak before the Kennesaw State University Economic Outlook conference on the U.S. economy at 12.45 a.m. ET.
