By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures edged higher on Thursday, as recent sharp losses attracted bargain hunters and the dollar was weaker.
Gold for April delivery GCJ2 +0.28% added $5.20, or 0.3%, to $1,647.90 an ounce on the Comex division of the New York Mercantile Exchange.
Gold sank 3% on Wednesday as reduced hopes of monetary stimulus dulled demand for the metal.
That was gold’s lowest settlement in more than eight weeks. Gold investors reacted to the declining likelihood of more easing measures by the Federal Reserve. Read more on Wednesday's sharp drop for gold.
“As the price falls below important support levels, we may see further selling on the part of money managers. We regard this development as positive for the gold price in the medium term, because the exit of ‘weak hands’ paves the way for the next price rise,” said analysts at Commerzbank in a note.
William Adams, head of research at metals-data provider FastMarkets, said that “there is a risk of further weakness, but equally we would not be surprised if bargain hunters start to provide support and if prices start to move higher, then follow-through buying may well follow.”
Gold prices were also buoyed by a weaker dollar, as the ICE Dollar index DXY -0.27% , which measures the greenback’s performance against a basket of six other currencies, traded at 80.377 from 80.596 in late North American trading Wednesday.
A decline in the dollar makes dollar-denominated commodities such as oil and gold more attractive for holders of other currencies.
Earlier Thursday, the U.S. Labor Department said the number of people applying for jobless benefits fell by 14,000 last week, matching a four-year low. Read about jobless claims.
A gauge of manufacturing in the New York area came in positive, although some aspects of the report, such as lower shipments and a decline in the six-month outlook, had some investors worried. Read about the New York factory index data.
“Overall, we feel the path of least resistance is sideways as the market weaves its way between robust U.S. demand, lackluster EU [European Union] demand and slower growth in China. As such, the markets are likely to be sensitive to today’s economic data,” Adams said.
The broader metals complex traded higher. Platinum continued to trade higher than gold. Gold had been trading at premium to platinum since mid 2011. Read more on the prices for platinum and gold.
April platinum PLJ2 +0.14% gained $4.70, or 0.3%, to $1,680 an ounce. Silver for May delivery SIK2 +0.46% added 13 cents, or 0.4%, to $32.32 an ounce.
May copper HGK2 +0.72% took on 1 cent, or 0.3%, to $3.86 a pound.
Palladium ticked higher, with the June contract PAM2 +0.28% adding $1.1, or 0.2%, to $698.55 an ounce.
