Gold jumps most in one week as dollar slides

Gold futures on the COMEX Division of the New York Mercantile Exchange continued to climb on Thursday, benefited from the weaker dollar and a reemergence of physical demand. Silver and platinum both rallied.

The most active gold contract for December delivery rose 8.8 U. S. dollars, or 0.8 percent, to finish at 1,171.2 dollars, the biggest gain for the most-active contract since July 20.

The U.S. Labor Department said Thursday that the number of people applying for initial unemployment benefits dropped 11,000 to 457,000 last week, compared with economist's expectation of 452, 500. The larger-than-expected decline suggested that the layoff may be easing, but the job market is still recovering at a glacial pace.

Meanwhile, a report showed that the European confidence in the economic outlook jumped to the highest level in more than two years in July, and the unemployment in Germany fell in July for the 13th month in a row, beating economist's expectations.

The higher-than-expected surge in economic sentiment has further alleviated investors' worries over the European and global economic outlook, and offered fresh support for the euro. The euro gained 0.9 percent against the dollar.

Dollar index hit a three-month low against a basket of six major currencies on Thursday, pressured by the job report as well as the positive eurozone data.

Gold pared earlier losses and surged later in the session, as the slide in dollar enhanced the appeal of gold as a safe-haven. Trader noted that the strong underlying physical demand for gold continued to offer solid support, but the rally in European and U. S equity markets have kept a lid on gold.

September silver added 17.6 cents, or 1.0 percent, to settle at 17.617 dollars per ounce, October platinum climbed 21.7 dollars, or 1.4 percent, to settle at 1,563.4 dollars per ounce.

Source: Xinhua