Forexpros – Gold futures tumbled to a four-day low on Thursday, as risk appetite recovered amid signs of political progress in Italy and Greece and after data showed that U.S. jobless claims fell to the lowest level in seven months last week.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,757.35 a troy ounce during U.S. morning trade, tumbling 1.9%.
It earlier fell by as much as 2.01% to trade at USD1,753.85 a troy ounce, the lowest price since November 4.
Italy’s Treasury auctioned EUR5 billion of one-year government bonds at an average yield of 6.08% earlier in the day, the highest since September 1997. Following the auction, the yield on 10-year Italian bonds fell back below the 7% mark, a level widely considered unsustainable for continued borrowing.
Meanwhile, Italian lawmakers prepared a package of deficit reduction and economic stimulus measures demanded by the European Union, ahead of a vote this weekend.
In Greece, former European Central Bank vice-president Lucas Papademos was named as Greece’s new interim prime minister, following days of talks amid a scramble to avert an imminent Greek default.
The news boosted the euro and other risk-sensitive assets, while reducing demand for safe havens such as the U.S. dollar and gold.
Gold prices came under additional pressure after the U.S. Department of Labor said that initial jobless claims fell by 10,000 to hit a seven-month low of 390,000 last week.
Despite the drop, Japanese investment bank Nomura raised its average gold price forecast to USD2,000 an ounce by the end of 2012, up from a previous estimate of USD1,800.
In a report released earlier, the brokerage cited the low-interest rate environment in the U.S., the European Central Bank’s easing monetary policy and the Bank of England’s second round of quantitative easing among the reasons for the precious metal’s attractiveness as an inflation hedge.
Elsewhere on the Comex, silver for December delivery sank 1.95% to trade at USD33.69 a troy ounce, while copper for December delivery tumbled 2.23% to trade at USD3.364 a pound.
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