Gold futures rallied to close higher Thursday, as investors returned to the precious metal as possibilities of further monetary stimulus for the economy seeming brighter after some leading comments from two Fed officials. The dollar also pared gains following the comments by the two Fed officials.
The dollar dropped, paring early gains, after New York Federal Reserve Bank chief William Dudley earlier in the day observed that the U.S. economy was not strong enough to make a significant dent in unemployment. His comment followed Fed Reserves Vice Chair Janet Yellen's reading yesterday for maintaining low interest rates for some time to come. Yellen believes the economy would grow only gradually with unemployment rate continuing to remain high for years.
Gold for June delivery, the most actively traded contract, shed $20.30 to close at $1,680.60 an ounce Thursday on the Comex division of the New York Mercantile Exchange.
Gold traded at an intraday high of $1,681.30 an ounce and a low of $1,651.00 an ounce.
Yesterday, gold ended marginally lower although investors continued to seek the precious metal as the U.S. and global equity markets rebounded. Prices found some support on a weaker dollar after some earlier concerns over the eurozone debt problems eased.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.36 on Thursday, down from 79.74 in North American trade late Wednesday. The dollar scaled a high of 79.77 intraday, with a low of 79.34.
The euro was trading higher against the dollar at $1.3207 on Thursday, as compared to $1.3109 late Wednesday. The euro had scaled a high of $1.3208 intraday with a low of $1.3104.
In economic news, a U.S. Labor Department report showed initial jobless claims rose to 380,000 from the previous week's revised figure of 367,000. Economists expected jobless claims to edge up to 359,000 from the 357,000 originally reported for the previous week.
A separate report from the US Commerce Department showed U.S. exports ticking up slightly and imports falling, indicating a trade deficit to $46 billion, down from the $52.5 billion posted in January. Analysts expected the deficit to shrink somewhat from January levels, but the consensus was a much higher deficit of about $51.7 billion.
In the euro area, industrial production increased unexpectedly in February, helped mostly by a marked increase in energy production, as per the Eurostat. Industrial production moved up 0.5 percent on a monthly basis in February, after remaining flat in the previous month. Economists expected a 0.2 percent decrease. Production in the 27-member European Union edged up 0.2 percent month-on-month during the period.
by RTT Staff Writer
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