Gold prices swooned further on Thursday, adding to losses in light volume as some investors unwound safe-haven trades, setting off automatic sell orders on the way down. Earlier, gold prices came off modestly when US weekly filings for unemployment benefits fell by more than forecast and the US international trade gap shrank by more than anticipated, but losses were limited.
Spot gold was bid at $1,248.10 an ounce at 1:46 pm EDT (1746 GMT), down from $1,254.50 late in New York on Wednesday, after it attempted to shoot for June's record high at $1,264.90 an ounce. US gold futures for December delivery were last $8.0 lower at $1,249.50 an ounce. Silver slipped to $19.81 an ounce, against $19.88 on Wednesday when it hit its highest level since early 2008 as investors sought a cheaper alternative to gold.
Gold "got a bit of a lift from concern over sovereign debt and European banks earlier in the week, but that has faded and it's tough ... to find a near-term catalyst to keep propelling the market higher and probably one of the reasons that we haven't hit new highs," said James Steel, an analyst for HSBC in New York. Gold has risen 15 percent in 2010 as economic uncertainty has spurred investment in perceived safe-haven assets. Analysts said investors remain uneasy about the global economy, so gold looks unlikely to shed its safe-haven appeal any time soon.
In fundamental news for gold, the South African statistics office said gold output fell 3.4 percent in volume terms, while total mineral production fell 1.0 percent in July. Gold output has been dwindling in South Africa, which is expected to drop in the rankings to the world's fifth-largest producer this year from fourth in 2009, according to Reuters data.
In the platinum group metals, traders kept an eye on developments at South African miner Northam Platinum, where union members are currently on strike and say action may continue for months. Platinum was last quoted at $1,551.50 an ounce, compared with $1,554.00 the day before, while palladium was at $521.0 compared with $522.00 on Wednesday.
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