LONDON - Gold steadied in Europe on Thursday as the dollar index pared gains, supporting interest in the precious metal as a hedge against currency weakness.
Traders awaited May leading indicators and the Philadelphia Fed June business activity index at 1400 GMT for their impact on the currency markets.
Spot gold was bid at $938.10 an ounce at 1307 GMT, against $938.40 an ounce late in New York on Wednesday. U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange rose $2.90 to $938.90 an ounce.
“The commodities sector as a whole is a little bit choppy right now, despite the short corrections that we’ve seen over the last few days,” said Tom Kendall, precious metals strategist at Mitsubishi Corp.
“There is still a bit of a downward bias across the broader metals and energy sector, but the dollar is what’s driving most of it,” he said.
The dollar pared gains against a basket of currencies, though it remained firmer.
The euro recovered losses against the U.S. currency and jumped versus the Swiss franc amid talk the Bank for International Settlements was acting on behalf of the Swiss National Bank to defend the 1.50 franc level versus the single currency.
The dollar had already lifted from lows against a currency basket after data showed the number of people staying on jobless benefit after collecting an initial week of aid fell for the first time since January.
Oil gave up its early gains to edge lower. Gold often tracks crude, as it can be bought as a hedge against oil-led inflation.
Strength in the U.S. currency makes all dollar-priced commodities, including gold and oil, more expensive for holders of other currencies.
U.S. stock futures turned higher after the jobless claims, but weakness in European equities helped offset downward pressure on gold.
Negative turn
European shares reversed initial gains to turn negative, while world stocks fell towards a three-week low they hit on Wednesday.
“(Gold) prices remain high despite profit taking in equity markets, as investors continue to hold large cash ... reserves,” said Fairfax analyst John Meyer in a note.
Investor interest in gold remains firm, though inflows into bullion-backed exchange-traded funds have tailed off since reaching highs at the beginning of 2009. Holdings of the SPDR Gold Trust, the largest gold ETF, are still near record levels.
Spot platinum was at $1,204.50 an ounce against $1,201, while palladium was flat at $240.50.
Platinum slipped below $1,200 an ounce for the first time since 1 June on Wednesday, but quickly recovered from lows as investors took advantage of lower prices.
“As with gold and silver, dip buying should continue to offer support for platinum in the coming sessions,” said James Moore, an analyst at TheBullionDesk.com.
Silver was at $14.25 an ounce against $14.32. Holdings of the world’s largest silver ETF, the iShares Silver Trust, remained at record levels on Wednesday.
