Forexpros – Gold futures traded flat Thursday, despite strong U.S. economic data and Greek default fears.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,728.95 a troy ounce during late U.S. trade, easing higher by 0.05%.
It earlier fell by as much as1.4% to trade at USD1,706.85 a troy ounce, the lowest since February 10.
Futures were likely to find short-term support at USD1,703.95 a troy ounce, the low from January 26 and resistance at USD1,739.15, Wednesday’s high and the highest since February 9.
Gold prices shrugged off a report showing that U.S. initial jobless claims unexpectedly fell to their lowest level since March 2008 last week, declining to 348,000, missing expectations for an increase to 364,000.
A teleconference call between euro zone finance ministers failed to resolve all the issues surrounding a second aid package for Athens, putting off any decision on the matter until Monday at the earliest.
Greece has a EUR14.5 billion bond repayment due on March 20 and requires the bailout funding in order to avoid default.
Gold remains more sensitive to moves in the euro/dollar exchange rate in the short term than to rising risk aversion, which has been a positive driver of prices.
Also weighing on sentiment, Moody’s said Wednesday it was placing over 100 financial firms across the world on ratings review due to the euro zone crisis.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.18% to trade at 79.60, the highest since January 25.
In other news, the World Gold Council said in its quarterly Gold Demand Trends report published earlier that gold demand surged to a 14-year high in 2011, boosted by increased investment demand in Asia and Europe as well as central bank buying, which hit the highest level in at least 40 years.
According to the council, global demand for gold reached 4,067.1 tonnes last year, the highest tonnage since 1997, due in large part to a nearly 5% rise in investment demand, which hit a record 1,640.7 tonnes.
In the final three months of 2011, China consumed 190.9 tonnes of gold, compared with India’s 173.0 tonnes, ranking China top in terms of consumption.
Total demand for gold in China in 2011 rose 20% to 769.8 tonnes, driven by jewelry and investment demand, compared with a 7% fall in demand in India to 933.4 tonnes as a result of volatile gold prices and a weak rupee.
The WGC also reported that European demand for the precious metal rose by more than a quarter year-on-year to 374.8 tonnes in 2011, as investors turned to the metal as the region’s debt crisis lingered.
According to the data, Germany and Switzerland were the main drivers of growth in demand in the region.
Central banks were avid buyers of gold, with 439.7 tonnes’ worth of purchases in 2011, more metal than at any time since the end of the gold standard in 1971, compared with a modest 77 tonnes in 2010.
Elsewhere on the Comex, silver for March delivery gained 0.04% to trade at USD33.43 a troy ounce, while copper for March delivery climbed 0.02% to trade at USD3.80 a pound.
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