Gold futures swung between gains and losses Thursday, after rising more than $50 in the previous two sessions to hit the highest level in seven months, as investors adjusted their positions while remaining skeptical toward U.S. economic-rescue plans.
Stocks and crude-oil futures, meanwhile, lost ground despite better-than-expected data on January U.S. retail sales, reflecting investors' lack of confidence in the economy.
Many analysts project further gains for gold as investors seek out a safe haven amid the macroeconomic troubles. Holdings in the largest gold exchange-traded fund hit a new record above 900 tons Wednesday, according to latest data.
Gold for February delivery was last up $2.80, or 0.3%, at $946.60 an ounce on the Comex division of the New York Mercantile Exchange. The front-month contract had rallied 5.8% over the previous two sessions to end at $943.80 an ounce Wednesday, the highest closing level since July.
Trading more actively, the April contract also rose slightly to stand at $945 an ounce.
Rescue plans
Commodities traders have been fixed on developments in Washington this week.
Negotiators from the House and the Senate reached agreement on a $789 billion economic-stimulus compromise late Wednesday, while Treasury Secretary Timothy Geithner rebuffed criticism of the Obama administration's bank rescue plan for not providing enough details.
The markets, however, remain skeptical of the government's plans. Energy traders on Thursday sold crude oil, considered a barometer of economic growth, for a fifth straight session. Read Futures Movers.
Investors' skepticism sparked flight-to-quality buying, leaving U.S. Treasurys and gold as the main beneficiaries, said analysts at Action Economics.
The U.S. dollar rose against its major rivals, pushed up by investors seeking safety in U.S. Treasurys. Read Currencies.
Gold above $1,000?
Some analysts predict gold prices will surpass $1,000 an ounce later this year, in line with expectations that gold will continue in demand as a safe haven against economic troubles.
"The prospects for $1,200 to $1,300 gold by end of the third quarter remain underpinned by a set of cogent fundamental variables involving currencies, interest rates and the global economy," said Ashraf Laidi, chief market strategist at London-based CMC Markets.
Holdings in SPDR Gold Shares , the largest exchange-traded fund backed by gold, reached 935.09 tons, climbing above 900 tons for the first time. That's up more than 40 tons from a day ago, and nearly 150 tons higher than a month ago.
The SPDR Gold Trust rose 0.5% to $92.72.
There was some good economic news Thursday. U.S. retailers rang up their largest increase in sales in more than a year in January, rebounding after six straight months of sharp declines.
First-time claims for state unemployment benefits dipped last week, although continuing claims reached a record high.
In other metals trading, March copper lost 0.8% to $1.527 a pound, while March silver fell 1.3% to $13.345 an ounce. March palladium eased 0.1% to $215.60 an ounce, and the April contract for sister metal platinum sank 0.4% to $1,076.10 an ounce.
In other equities, shares of Barrick Gold Corp. , the world's largest gold mining company, gained 1.1% to $39, while Goldcorp Inc. added 0.3% to $31.60, and South Africa's Gold Fields Ltd. fell 1.8% to $11.33.
The Amex Gold Bugs Index , which tracks the share prices of major gold companies, slid 0.4% to 316.27.
The iShares Gold Trust ETF edged up 0.4% to $92.78, while the iShares Silver Trust ETF lost 0.5% to $13.28.
