Gold futures trimmed gains on Thursday, after data showed that the number of people who filed for unemployment assistance in the U.S. last week fell more-than-expected, fuelling speculation the economy will be strong enough to allow the Federal Reserve to continue withdrawing support through 2014.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,227.20 a troy ounce during U.S. morning trade, up 0.13%. Gold prices held in a tight range between USD1,223.50 a troy ounce and USD1,230.60 a troy ounce.
The February contract settled 0.33% lower on Wednesday to end at USD1,225.50 a troy ounce. Futures were likely to find support at USD1,212.60 a troy ounce, the low from January 6 and resistance at USD1,244.70, the high from January 7.
Meanwhile, silver for March delivery inched up 0.15% to trade at USD19.56 a troy ounce. Comex silver prices traded in a range between USD19.43 a troy ounce and USD19.69 a troy ounce.
The March contract ended Wednesday’s session down 1.25% at USD19.53 a troy ounce. Futures were likely to find support at USD19.31 a troy ounce, the low from January 8 and resistance at USD19.86, the high from January 8.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending January 4 declined by 15,000 to a seasonally adjusted 330,000. Analysts had expected U.S. jobless claims to fall by 10,000 to 335,000 last week from the previous week’s revised total of 345,000.
Investors now turned their attention to Fridays’ U.S. nonfarm payrolls report for indications on the timing of further reductions to the pace of the Federal Reserve’s stimulus program.
Wednesday’s minutes of the central bank’s December meeting showed that the Fed board cited a stronger labor market in its decision to cut its asset purchase program by USD10 billion to USD75 billion-a-month.
The minutes also showed that officials were keen to stress that further reductions were not on a “preset course” and would be undertaken in “measured” steps.
Some market participants believe the central bank will taper its bond purchases by USD10 billion in each of its next seven meetings before ending the program in December 2014, amid indications of an improving U.S. economy. The Fed is scheduled to meet January 28-29 to review the economy and assess policy.
Meanwhile, European Central Bank President Mario Draghi reiterated that euro zone borrowing costs will remain at their present or lower levels until conditions improve, indicating that further rate cuts are still possible.
Draghi’s comments came after the ECB held its benchmark interest rate at a record low 0.25%, in line with expectations.
Elsewhere on the Comex, copper futures for March delivery shed 0.9% to trade at a two-week low of USD3.312 a pound. Data released earlier showed that consumer price inflation in China slowed to a seven-month low of 2.5% in December from 3% in November.
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