ND: Gold Rises Again As Traders Ponder Rate Decisions
Gold prices rallied again on Thursday as traders considered interest rate decisions from the UK and Eurozone and more grim economic data from the U.S. The metal has added more than $20 over the last two sessions to pare some losses from earlier in the week.
April gold climbed to $914.20, up $12 on the session. The metal hit as high as $926.30 earlier in the session.
Interest rate decisions were again in focus on Thursday. The European Central Bank left its key interest rate unchanged at 2% after reducing the rate four times since October 2008. Meanwhile, the Bank of England lowered its key interest rate by 50 basis points to 1%.Both moves were highly-expected.
In the U.S., the Labor Department report showed that initial jobless claims rose to 626,000 from the previous week's revised figure of 591,000. Economists had expected jobless claims to edge down to 580,000 from the 588,000 originally reported for the previous week.
On Friday, the government will release its monthly jobs report. Economists anticipate a loss of 553,000 jobs and an unemployment rate of 7.4%.
A separate Labor Department report showed that non-farm labor productivity jumped 3.2 percent in the fourth quarter following a revised 1.5 percent increase in the third quarter. Economists had been expecting a more modest increase of about 1.5 percent.
Later, a Commerce Department report showed that orders for manufactured goods fell by 3.9 percent in December following a revised 6.5 percent decrease in November. Economists had expected orders to fall by 3.1 percent compared to the 4.6 percent decrease originally reported for the previous month.
Also on Thursday, UBS raised its forecast for the price of gold, saying it now predicts the metal to average $1,000 an ounce in 2009. This is up from the previous forecast of $700.
The dollar was mixed versus other majors on Thursday, skyrocketing versus the yen but staying under heavy pressure versus the resurgent sterling. Gold usually moves opposite the dollar because of the precious metal's hedge appeal.
The price of gold added more than $9 to top $900 an ounce on Wednesday and pared some of its recent slump. Gold fell $14.70 on Tuesday, adding to the drop of more than $20 from the previous session. The slide took the metal away from a six-month closing high from Friday.
