Gold slips as U.S. data calm economic fears

Gold edged down in thin trade on Thursday after encouraging U.S. jobless claims data calmed some worries about economic growth, but concerns over tensions on the Korean peninsula could offer some support.

Bullion barely reacted to news that Vietnam's central bank had granted additional quotas for domestic companies to import gold between now and the year end, but dealers noted buying on dips from consumers in Hong Kong and Southeast Asia.

Spot gold eased $1.56 to $1,372.15 an ounce by 0640 GMT - well below a lifetime high around $1,424 struck in early November. It had hit an intraday low around $1,367 an ounce.

U.S. gold futures fell $1.2 to $1,371.8 an ounce.

U.S. markets are shut on Thursday for the Thanksgiving holiday. "I would say sentiment is still bullish. The conflict between North and South Korea is not going be solved within a short period of time," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

"It will take a bit of time. There may be more buying at below $1,370."

South Korea said on Thursday it would increase troops on islands near North Korea with Pyongyang, warning it would follow its bombardment earlier in the week with more attacks if its wealthy neighbour tried any "provocations".

The United States says it believes North Korea's actions were an isolated act tied to leadership changes in Pyongyang, and many experts say the North carried out the shelling to burnish the image of the inexperienced and little-known younger Kim.

In the currency market, the euro struggled near a two-month low as the euro zone debt crisis showed signs of spilling over from Ireland to other euro zone members even after Ireland unveiled an ambitious austerity plan.

But in the United States, initial jobless benefits claims fell to their lowest level in more than two years last week while consumer spending rose for a fourth straight month in October, fueling hopes the economic recovery is strengthening.

"I would say there's a mixed bag of trading today. We see sales of scrap but at the same time, there's also physical buying. Honestly, consumers don't want to get short. Each time, they will just buy on dips," said a dealer in Singapore.

"But the U.S. holiday deters people from doing much.

There's some light buying from Indonesia and we did see buying from India yesterday," said the dealer.

The gold market in India, top consumer of the metal, is still in the midst of its busy season after the Dhanteras and Diwali festivals earlier this month as many weddings are to take place till December, spurring at least some demand for the metal that plays an important role in social functions.

Tokyo gold futures were mostly steady, with no signs of panic buying among Japanese investors despite tensions in neighbouring Korea.

"The Japanese don't seem to show interest in buying gold as a safe haven, although our neighbours are involved in a serious conflict," said a physical dealer in Tokyo. "Maybe the Japanese are optimistic it could be resolved."

Oil edged lower on Thursday, after rising more than 3 percent a day earlier on strong U.S. macro-economic data, as concerns about European debt lingered.

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