NEW YORK (
reversed losses Thursday as the U.S. dollar weakened.
Gold for April delivery was adding $11.04 to $1,108.60 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,110 and as low as $1,088.50. The
was rising 0.11% to $80.87.
Gold Prices Reach for $1,100
Gold prices managed to close at $1,097.20 Wednesday after paring earlier losses. Investors were encouraged by Ben Bernanke's testimony to Congress that key interest rates would remain low for an extended period of time. Lower rates and more free money are expected to put long-term pressure on the U.S. dollar and buoy gold prices. The
chairman will conclude his testimony over the economy and monetary policy on Thursday.
But gold came under pressure early Thursday as
fears plagued the euro. Both Standard & Poor's and Moody's are threatening to slash Greece's credit rating. Greece has until March 16 to provide a plan to the European Union detailing spending cuts and tax increases. These more severe measures have resulted in riots and labor strikes throughout the country that has tempered investor risk appetite and weighed heavily on the euro. A weaker euro supported the U.S. dollar and hurt gold prices.
Risk appetite was also damaged after worse-than-expected
weekly jobless claims
. The number of people filing for unemployment rose by 22,000 to 496,000 claims. Analysts were expecting a decline.
Around midday, gold pared its losses and broke the critical $1,100 area, helped by dollar weakness and an unconfirmed rumor that China would buy the remaining 191.3 tons of gold from the IMF. Despite multiple reports that have said China was uninterested in buying more gold after increasing its reserves to 1.5% or 1,054 tons,
reported that China will buy the remaining tons.
The IMF announced the sale of its remaining 191.3 tons to the open market in mid-February. Reportedly the IMF couldn't sell its gold to central banks like China and India, traditional big buyers, so had to resort to the open market. Investors were worried that markets wouldn't be able to absorb that amount of gold and that prices would come under pressure. Any central bank buying would trigger momentum buying as investors follow suit and buy gold as an alternative asset.
"For the moment, the low $1,090s, high $1,080s, have proven pretty resilient," says Jon Nadler, senior analyst at Kitco.com. "There was some fairly decent bargain hunting down at those levels. Hopefully that will hold because otherwise we are looking lower into the $1,070s and possibly the $1,020s eventually."
were adding 17 cents to $16.11 while copper was down 4 cents to $3.19.
Mining stocks, a more leveraged way to
, were improving.
was rising 2.23% to $37.52 while
was adding 3.30% to $18.17.
was popping 6.37% to $49.45 after reporting fourth-quarter earnings of $1.14 a share on revenue of $2.05 billion.
was higher by 3.52% at $37.66.
Freeport McMoRan Copper & Gold
were rising 1.80% to $73.99 while
was adding by 4.06% to $10.50.
The popular physically backed ETF
SPDR Gold Shares
was adding 1.07% to $108.51.
Written by Alix Steel in New York
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.