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) --

Gold prices

plummeted on Thursday on a stronger U.S. dollar and

disappointing weekly U.S. jobless claims.

Why Gold Could Keep Sinking

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Gold for April delivery was slipping $45.80 to $1,066.20 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,112 and as low as $1,060.40. The

U.S. dollar index

was rising 0.55% to $79.85.

European sovereign debt fears from Spain, Portugal and Greece dragged on the euro, bringing the currency down to a seven-month low against the U.S. dollar. The continued strength in the dollar is putting pressure on gold, as the metal is more expensive to buy in other currencies. Gold prices are finding support from physical buying at the $1,080 level, but their failure to push past $1,125 creates a tight trading range.

Gold prices are also coming under pressure ahead of Friday's U.S. nonfarm payroll report. Analysts were hoping for positive news, but on Thursday the

Labor Department

said first-time applications for unemployment benefits rose more than expected last week.


TheStreet Recommends

It doesn't bode very well. Dow futures took it pretty bad," says Jon Nadler, senior analyst at "The dollar became a safe haven play once again and gold broke back under the $1,110 mark after starting the week pretty enthusiastically." Many analysts expect this risk aversion trade to continue and the dollar to remain a safe haven asset.

Silver prices

were sinking 85 cents to $15.46 while copper was down 9 cents to $2.88. Platinum and palladium were sinking to $1,509 and $408, respectively.

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Why Gold Could Keep Sinking

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Mining stocks, a more leveraged way to

">invest in gold

, were in free-fall.

Barrick Gold


was falling over 5.50% to $33.97.

Newmont Mining

(NEM) - Get Newmont Corporation Report

was sinking 4.64% to $43.74 and

Kinross Gold

(KGC) - Get Kinross Gold Corporation Report

was down 5.18% to $16.41. This comes after

Deutsche Bank

initiated both Newmont and Kinross with buy ratings.

Shares of

Freeport McMoRan Copper & Gold

(FCX) - Get Freeport-McMoRan, Inc. Report

were falling 5.07% to $67 while

AngloGold Ashanti

(AU) - Get AngloGold Ashanti Ltd. Report

was down 3.64% to $35.30.

Royal Gold

(RGLD) - Get Royal Gold, Inc. Report

was lower by 3.31% to $42.20 even after the company reported better-than-expected second quarter earnings of 23 cents a share.

Shares of the popular physically backed ETF

SPDR Gold Shares

(GLD) - Get SPDR Gold Shares Report

were slipping 4.06% to $104.42. The ETF shed 1.59 tons on Wednesday as investors fled from riskier commodities.

>>Slideshow: How to Invest in Gold

>>More stories on gold investing


Written by Alix Steel in New York


Alix joined 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.