Gold tries for a rebound, but dollar strength caps gains – MarketWatch

Gold futures traded mostly higher Thursday, with prices attempting to recoup some of their recent losses, but strength in the U.S. dollar kept a cap on the metal’s climb.

December gold

GCZ5, -0.03%

rose 90 cents, or 0.1%, to $1,168 an ounce on Comex. It flipped between losses and gains earlier, after posting its lowest settlement in more than a week on Wednesday. Prices are still up nearly 5% for the month.

The European Central Bank left rates unchanged Thursday as expected. At a news conference, the ECB’s Mario Draghi hinted that the central bank could announce more easing measures at its December meeting.

The euro

EURUSD, -1.8872%

 weakened after the news, providing support for the U.S. dollar. A stronger greenback can be a headwind for dollar-denominated commodities, making them more expensive to buyers using other currency units.

But gold prices edged higher anyway. The way gold is “holding steady relative to USD shows that the big rally in the [U.S. Dollar Index

DXY, +1.27%

] is being driven mainly by EUR weakness than any change in attitudes toward the U.S.,” said Colin Cieszynski, chief market strategist at CMC Markets. The dollar index trades more than 1% higher week to date.

Read: Euro’s fate hinges on Draghi’s words

Data Thursday was mixed, failing to offer a clear view of the U.S. economy, adding to uncertainty over the timing of a Federal Reserve interest-rate hike. A report showed that the four-week average of U.S. initial jobless claims fell to its lowest level in four decades, but claims for the latest week inched higher. Existing home sales, meanwhile, rose in September to its second-highest monthly level since Feb. 2007.

Market participants were also digesting a bearish research note from Goldman Sachs Group

GS, +1.92%

which predicted that gold prices might slip to $1,000 an ounce in the next 12 months, pressured by the Fed’s plans to raise interest rates from ultralow levels. Higher rates can diminish the appeal of gold, which doesn’t offer interest.

Read: Goldman Sachs says don’t get used to the revival in gold prices

In other metals, December silver

SIZ5, +0.89%

 picked up 11 cents, or 0.7%, to $15.82 an ounce, while December high-grade copper

HGZ5, +0.87%

gained 3.8 cents, or 1.6%, to $2.399 a pound.

January platinum

PLF6, +0.53%

 rose a dime to stand at $1,007.20 an ounce, but December palladium

PAZ5, +1.23%

 added $1.05, or 0.2%, to $678.20 an ounce.