Gold edged lower, silver down 0.2 percent at $30.43 an ounce on Thursday

Gold edged lower on Thursday as the euro’s retreat from highs in the wake of U.S. economic data prompted some buyers to cash in gains in the precious metal after a three-day run higher took prices to their strongest since mid-December.

Spot gold was down 0.4 percent at $1,652.86 an ounce at 1436 GMT, having earlier peaked at $1,669.75, its highest since Dec. 13. It has had a positive start to the year, up more than 6 percent since end December.

“Booking some profit after a strong run makes sense,” said Saxo Bank senior manager Ole Hansen. “(The rally) is not overdone and will continue, but we need to retrace, have the support below confirmed before the next attempt.”

“The euro rally could be running out of steam ahead of $1.30,” he added.

The euro pared gains against the dollar after U.S. data showed a sharp decline in first-time jobless claims last week and tame consumer prices in December. It rose in earlier trade after well-received Spanish and French debt sales soothed worries over the euro zone debt crisis.

European stocks rose on Thursday in brisk volume as investors rotated out of defensives and into banks.

Risk appetite was helped by news that the IMF is seeking to more than double its war chest by raising $600 billion in new resources to help countries deal with the fallout of the euro zone debt crisis.

“Despite the United States and UK saying that they would not commit to such a move, the market took heart that this would help ease the fiscal problems facing the euro zone,” said Standard Bank in a note.

“This renewed confidence has seen markets adopt a cautious risk-on stance, pulling the dollar down and consequently easing downward pressure on precious metals and commodities in general.”

Traders awaited the outcome of talks between Greece and its private creditors, who meet for a second day of bargaining on a crucial bond swap deal on Thursday, with time running out for reaching a compromise needed to avoid a default.

LUNAR NEW YEAR LOOMS

Swiss bank UBS said in a note that gold’s ability to rise even without the prospect of continuing strong physical demand, boded well for the precious metal.

1 2

Tags: Gold analysis, Gold future prices, Gold futures, Gold investment, Gold news, Gold price, gold price forecast, Gold prices, price of gold, Spot gold, Spot gold price

Posted by admin on Jan 19 2012. Filed under Gold price. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry