MW: Gold extends gains to above $920 as stocks fall
Gold futures rose Thursday for a second session, trading above $920 an ounce as lower stock markets increased the metal's investment appeal.
Asian and Europeans stocks dropped on Thursday, while U.S. markets also opened lower. Meanwhile, holdings in the largest gold exchange-traded fund rose to a new record level near 1,040 tons.
Gold for April delivery, the most active contract, rose $13.30, or 1.5%, to $924.10 an ounce on the Comex division of the New York Mercantile Exchange.
"Continued uncertainty over the economic outlook, along with fragile equity markets encouraged investor activity [in gold]," wrote analysts at Action Economics.
Holdings in the SPDR Gold Shares hit a new record of 1,038.17 tons Wednesday, according to latest data by the fund. That's up 9.18 tons from the previous day.
Trading in the precious metal remained volatile this year. It topped $1,000 on Feb. 10, up nearly $200 from this year's low hit in mid January. Then the metal slumped more than $100 in just about three weeks to below $900 on Tuesday.
Jan Nadler, senior analyst at Kitco Bullion Dealers, said gold's recent rally to above $1,000 "exhibits the unmistakable footprints of speculative hedge funds."
As the buying stopped suddenly, and as some investors were forced to sell gold to cover their losses in other markets, gold started falling, he added.
In currencies trading Thursday, the dollar index which gauges the value of the greenback against a basket of other major currencies, erased earlier losses, rising slightly to 88.024. A stronger dollar tends to put downward pressure on dollar-denominated gold prices.
On the economic news side, the number of workers filing initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 654,000 last week, the Labor Department reported Thursday.
The smoothed average of new claims over the past four weeks rose 6,750 to 650,000 -- the highest level since October 1982.
But there was also good news. U.S. retail sales began the year much stronger than expected, according to Commerce Department figures released Thursday. Retail sales dropped 0.1% in February, better than the 0.4% decline expected by economists surveyed by MarketWatch.
In other metals trading, May silver rose 0.7% to $12.885 an ounce, while April platinum gained 0.2% to $1,059 an ounce and the June contract for palladium rose 0.2% to $199.50 an ounce. May copper fell 0.4% to $1.6195 a pound.
