Gold Prices Gain as Dollar Pressure Mounts (Update 1)

Updated from 12:26 p.m. ET with settlement prices and late-session change in the gold market

NEW YORK (TheStreet) -- Gold prices finished higher on Thursday as pressure mounted through the trading session on the U.S. dollar.

Gold for April delivery added $2.30 to settle at $1,590.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,592.20 and as low as $1,575.20 an ounce, while the spot price was increasing $2.90 cents, according to Kitco's gold index.

The U.S. dollar index was falling 0.39% to $82.60. The euro was adding most of the downward trend on the greenback as the eurozone currency rose to $1.3005, up from the prior day's close at $1.2961. The dollar also was shrinking against the Japanese yen to 96.04 yen, down from the previous-day close of 96.11 yen.

The dollar index hit a fresh 7.5-month high earlier in the session, before coming back off those levels. But Kitco.com's Jim Wyckoff said the yellow metal has proved resilient against the greenback's recent strength.

"Given the solid price uptrend that the dollar index has seen, one might have thought gold prices might be starting to trend lower, but actually the past couple of weeks gold prices have been trading sideways," Wyckoff said in an interview. "The gold market bears appear to have become exhausted, and I think you're seeing some bargain hunting -- maybe some safe-haven demand -- trickle into the marketplace that is keeping a floor under the market."

Prices traded lower in the morning after better-than-expected initial jobless claims added to a mounting number of economic indicators that have suggested the U.S. economy is improving.

The Federal Reserve has pegged its policy of low interest rates to an unemployment rate of about 6.5%. In other words, the Fed would begin to raise interest rates should unemployment dip below 6.5%, or if inflation rises to more than 2.5%.

The Labor Department reported Thursday the number of people who filed for unemployment insurance benefits fell by 10,000 to 332,000 in the week ended March 9. This number dropped from the prior week's revised 342,000 claims. Consensus among economists was looking for claims to rise to 350,000.

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