By Claudia Assis and Nick Godt, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures fell Thursday as the flow of safe-haven buying diminished and as some investors took profits following a 1.3% rally in the previous session.
Gold for December delivery GC1Z -1.28% lost $24.90, or 1.5%, to $1,657.20 an ounce on the Comex division of the New York Mercantile Exchange.
Gold stopped $18 short $1,700 a ounce the previous session, “which could mean renewed selling by short-term oriented financial investors,” analysts at Commerzbank said in a note.
“Furthermore, with brighter market sentiment in the past few days, the need to acquire gold as a safe haven has lessened,” they added.
Physical demand, mainly from Asia, is likely to prevent a sharper price pullback, they said.
On Wednesday, hopes for a plan to recapitalize European banks and an expanded European bailout fund led to gains in gold and other metals.
Gold had plunged in recent weeks as worries about the euro zone’s sovereign-debt crisis grew intense — so much so that some investors sold positions in the metal to raise cash to cover bets in other markets.
Also working against gold, the euro gave ground against the dollar as the dollar index DXY +0.42% , which measures the U.S. unit against a basket of major currencies, moved up to 77.368, from 76.977 late Wednesday.
A stronger dollar makes gold and other commodities more expensive to holders of other currencies, chipping away at their appeal.
December silver SI1Z -3.31% also fell, losing $1.08, or 3.4%, to $31.68 an ounce.
Copper for the same month’s delivery HG1Z -2.48% retreated 10 cents, or 2.9%, to $3.30 a pound.
Silver and copper had rallied with gold Wednesday, with silver ending the day 2.5% higher and copper 3.1% higher.
Earlier Thursday, investors grappled with news that new applications for jobless benefits in the U.S. reflected little change in weak hiring patterns.
Initial jobless claims declined by 1,000 last week to 404,000, the Labor Department said. Read more about jobless claims.
