Gold Pops After Factory Data

The dollar was recently buying 120.73 yen, down from 121.61 yen late Wednesday. The euro was buying $1.3029 up from $1.2967 previously. The value of gold tends to move inversely with that of the U.S. currency.

Providing some more lift for gold was news out of the United Kingdom that suspected terrorists were planning to kidnap a British Muslim soldier and videotape his beheading, the Associated Press reports. Authorities arrested nine suspects following predawn raids.

Elsewhere, Reuters reports that North Korea is threatening to detonate another nuclear weapon if progress isn't made by continuing talks with the U.S. and other nations.

Gold is often purchased during times of war or geopolitical instability, and such worrisome news will likely help keep a floor under prices.

The Amex Gold Bugs Index rose 2%, with components Eldorado Gold(EGO Quote) and Gold Fields(GFI Quote) helping lead the charge, up 4.4% and 3.8%, respectively.

Turning to base metals, Comex copper contracts tacked on 3 cents to close at $2.59 a pound.

Canadian aluminum smelter Alcan(AL Quote) reported disappointing earnings, but the shares were still ahead by 0.3%.

As for ferrous metals, U.S. Steel(X Quote) received a rating upgrade from Longbow to neutral from sell. In addition, Goldman Sachs upped its stock price forecast to $113 from $104. The stock moved up about 4%.