The price of gold climbed back above $900 an ounce on Thursday and approached a four-month high reached earlier in the week. The metal's hedge appeal was boosted by an assortment of dismal economic reports.
February gold jumped $16.90 to finish the session at $905.10 per ounce, challenging Monday's four-month closing high of $908.80. The metal hit as high as $908.60 in intraday trading on Thursday.
On the economic front, a Commerce Department report showed that new home sales fell 14.7 percent to an annual rate of 331,000 in December from a revised rate of 388,000 in November. Economists had expected sales to fall to 400,000 from the 407,000 originally reported for the previous month.
Earlier, Department of Labor data revealed initial jobless claims rose to 588,000 for the week ended January 24. This was up from a revised level of 585,000 recorded in the previous week.
Meanwhile, a Commerce Department report showed that durable goods orders fell 2.6 percent in December following a revised 3.7 percent decrease in November. Economists had been expecting orders to fall by 2.0 percent compared to the 1.5 percent decrease that had been reported for the previous month.
Despite the economic news, the dollar was able to gain versus the euro after unemployment in Germany rose more than expected in January as deepening economic crisis forced companies to cut their workforce. The buck was stable against the pound and lower versus the yen.
Traders had their first chance to react to the Federal Reserve's interest rate decision. The metal market closed before the Federal Open Market Committee announced it decided to keep its target range for the federal funds rate near zero, as expected.
The FOMC also warned conditions in the credit markets are "extremely tight," indicating that conditions have worsened since their December meeting. Voting to keep interest rates unchanged from their target range between zero and 0.25 percent, the Federal suggested that deflation could be a risk.
