Gold Edges Higher

Updated from 11:14 a.m. EDT

Metal traders struggled to find meaningful direction Thursday despite stout economic data.

The Department of Labor reported that last week's initial jobless claims were 308,000 vs. a forecast of 312,000. The figure for the prior period was revised slightly upward to 304,000 from 302,000. Separately the Commerce Department announced a bigger-than-expected trade deficit of $69.9 billion for August. Investors had expected the deficit to hit $66.5 billion, down slightly from the prior month's $68 billion.

Finally, the Federal Reserve's beige book report was generally upbeat with just two Fed districts reporting that growth "cooled" compared to five in the September beige book. The Fed believes inflationary pressures remain contained but the report notes that labor market conditions remain "taut," which prompted further discussion of wage inflation.

But bullion traders took a back seat as the strong economic data helped push the major indices to new highs. The Dow Jones Industrial Average was recently rallying 78 points at 11,930, looking set for another record. On the other side of Wall Street, bullion trading was subdued with contracts for December delivery edging higher to end the session at $580.30 an ounce up $3.80 on the Comex division of the New York Mercantile Exchange.

The weak performance of the metal this fall has been a disappointment to some gold bugs, but other observers note that seasonally robust demand for jewelry in India may have prevented a total meltdown.

"The physical buying has prevented the market falling even lower," says James Moore, an analyst at TheBullionDesk.com in London. "I think we are still seeing a lot of physical interest from India, but we are approaching the end of the wedding season, so that may drop off soon."