Gold Prices Fight Back After Losing Ground

NEW YORK (TheStreet) -- Gold prices fight back.

Gold is seeing more strength Thursday on the back of a weaker U.S. dollar. The precious metal started reclaiming lost ground Wednesday after a multi-day losing streak. Prices settled Wednesday at $1,094 an ounce.

Mixed economic data supported signs of an economic recovery, prompting an uptick in equities and commodities and a slight decline in safe haven assets like the dollar. The U.S. dollar index was slipping .25% to $77.73 while gold was rising $7.10 to $1,101.10 an ounce at the Comex division of the New York Mercantile Exchange.

Gold prices are in a tug of war between a stronger U.S. dollar and profit taking -- which weigh on prices -- versus bargain hunting, which creates support. For now bargain hunters appear to have won out and are buoying the precious metal as it dips below the $1,080 level.

Markets close at 1pm E.S.T. for the Christmas holiday and volume is expected to be light, which could lead to short-term volatility.

"Conditions are indeed thin, so the markets are going to show exaggerated moves today as well as any time next week," said Jon Nadler, senior analyst at Kitco.com. "I would caution that whatever we see in these markets for the next few sessions is not to be really considered 'real moves'....I think $1,070 better hold or else we are looking to $1,020-$1,050 area as a possible deeper cleanout."

Gold delivery for February, the most actively traded contract, has traded as high as $1,106.90 and as low as $1,088.30. Silver prices were rising 30 cents to $17.32 while copper was adding 4 cents to $3.24.