Updated from 1:13 p.m. EST with settlement prices
NEW YORK (
on Thursday reversed the prior day's gains as the yellow metal was sinking as stocks moved mostly lower.
Gold rose 1.3% on Wednesday
Gold for April delivery dropped $19.60 to $1,662 an ounce at the Comex division of the New York Mercantile Exchange. The
traded as high as $1,681.70 and as low as $1,658.40 an ounce, while the spot price was falling $14.50, according to Kitco's gold index.
"I think markets are treading water and waiting for some new signal, or stronger signal plus or minus; I think in the short run we could go in either direction," said Jeffrey Nichols, senior economic adviser at Rosland Capital.
Gold has traded in a tight range in recent days as investors have navigated through option expiration, a poor gross domestic product report and an unsurprising
policy-making announcement this past week.
Traders are also poised to analyze the Bureau of Labor Statistics January employment situation report and the Institute for Supply Management Manufacturing survey, both expected to print Friday morning.
for March delivery lost 83 cents to $31.35 an ounce, while the
U.S. dollar index
was shedding 0.10% to $79.18.
The Fed has closely pegged its policy of low interest rates to the unemployment rate and inflation -- the so-called dual mandate. The central bank has said that it would keep interest rates low for as long as unemployment remained elevated above about 6.5% and inflation below 2.5%.
Should unemployment continue to slope down toward that 6.5% threshold, many analysts have suggested it could signal the eventual conclusion of the open-ended mortgage-backed securities and longer-term Treasuries purchases by the Fed.
Nichols and other gold analysts have said that gold is stuck in a trading range for the near term and could move in either direction. But a decided pop or slump would require an unexpected trigger, such as a big drop in the unemployment rate, a sudden greater loosening of monetary policy or a meaningful uptick in global economic growth, among other scenarios.
Ultimately, gold may hold higher as accommodative monetary policy in the U.S., Europe and Japan may continue through 2013, according to Nichols.