Gold hits session lows before stabilising as euro tumbles

Gold slumped to session lows before stabilising during Thursday afternoon business after bearish US weekly jobs numbers forced the euro to retreat as risk appetite moderated, although kept afloat by dip buying amid a still-muddy economic outlook in Europe.

Spot gold was last indicated at $1,388/1,388.80 per ounce, down 10 cents but off a session nadir of $1,384 and still generally rangebound. On the charts, having gone through resistance at $1,394, the next level is $1,397, $1,407 and $1,411. Support is pegged at $1,381, $1,375 and $1,360.

US weekly unemployment claims came in higher than expected at 436,000, from a forecast of 425,000 and rising from 407,000 in the previous week - today's data provided a precursor to Friday's much-anticipated nonfarm payroll figures. Earlier the ECB decided to keep its interest rate on hold at one percent.

The euro slumped heavily following the data to an intraday low of 1.3060 versus the dollar - it was last at 1.3091, down over a quarter of a cent. European equities markets fell following the data - the FTSE 100 was up -.5 percent while the DAX and CAC40 reversed into negative territory, down 0.2 and 0.1 percent. Ahead of the New York open, US futures were last pointing marginally higher.

In other precious metals, silver tracked gold lower following the jobs news and was last trading at $28.39/28.44 per ounce, down five cents. Platinum was last indicated at $1,701/1,706, up $18 but off a three week high this morning at $1,712. Palladium was trading at $738/743, up $5 on the day - it had struck a nine-year high this morning at $753.

source