Daily Gold Update

Source: Market Watch

SAN FRANCISCO— Gold futures settled modestly lower Thursday, retreating from their four-month highs as buying prompted by currency fears fizzled. Gold for June delivery lost $3, or 0.3%, to $1,168.80 an ounce on the Comex division of the New York Mercantile Exchange. The contract earlier hit an intraday low of $1,162.20 an ounce. Other metals posted gains as investors focused on the lower dollar and the generally improved sentiment about the global macroeconomic picture and, by extension, about industrial demand for some base and precious metals.

Reports that Greece may get a sweetened aid package took the wind out of bullion buying on concerns about the falling value of some of the world's most liquid paper currencies. "You're seeing some of that flight to safety and safe-haven buying coming off a bit," said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. "But it really is a small move considering the movements we had." Physical buying was "lackluster" on Thursday, said Pradeep Unni, an analyst with RichComm Global in Dubai. Gold came under pressure as investors grew more confident a rescue agreement for debt-strapped Greece will soon be reached. Concerns over spreading contagion to other European countries lessened somewhat on reports Wednesday that officials were considering a multi-year rescue package for Greece that could total more than 100 billion euros ($133 billion), compared to prior plans for a one-year aid package of roughly 45 billion euros. Gold's drop Thursday followed a rise to $1,171.80 an ounce on Wednesday, its highest close since early December, after a downgrade of Spain's debt escalated worries about a sovereign debt crisis in Europe. Gold held on to its losses following a report on U.S. unemployment claims. The number of people filing initial claims for unemployment benefits declined by 11,000 in the week ended April 24 to a seasonally adjusted 448,000, the Labor Department reported Thursday. See Full Story