Gold for December delivery closed up $5.30 to $1,253.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,255.20 and as low as $1,245.30 on Thursday. The U.S. dollar index was rising slightly at $82.50 while the euro was flat at $1.28 vs. the dollar. The spot gold price Thursday was rising $7, according to Kitco's gold index.
The Dow Jones Industrial Average rose 254 points Wednesday and gold prices took a minor $2 hit lower for the day. The equity rally was stalling out Thursday as investors stayed cautious ahead of Friday's U.S. unemployment report and were tentatively adding to their gold positions.
Gold was also finding some support from the European Central Bank, as the eurozone's central bank left key interest rates at 1% and President Jean-Claude Trichet said that its short-term lending facilities will continue until early next year. The ECB also forecast that the eurozone would grow at a moderate rate between 1.4% to 1.8% in 2010, although the economic conditions are still uncertain. Trichet's comments were more upbeat but low rates means more euros in circulation, which supports gold's appeal as a form of currency that retains some value.Most experts expect gold to trade in a tight range as prices wait for a catalyst. "There's a battle going on in the $1,250 area," says George Gero, vice president of global futures at RBC Capital Markets, "between the mining companies that sold the $1,250 calls and the funds that bought the $1,250 calls." (GLD), on the other hand, added 1.5 tons on Wednesday even as shares closed 0.32% lower at $121.69.