Spot gold rallied to trade around $1,010 on Thursday as the precious metal continued to look to the dollar for direction, though a sense of caution prevailed due to the threat of heavy liquidation of futures positions. Spot gold, which fell in the previous session after the dollar turned higher, is currently down about 1 percent from an 18-month high of $1,023.85 hit last Thursday.
"The trend of a strong euro and weak dollar is what's keeping the price of gold above $1,000," said Shuji Sugata, a manager in the Mitsubishi Corp Futures & Securities research team. The euro was around $1.4719, recovering from earlier losses when it fell as low as $1.4685 on trading platform EBS, to trade slightly below the levels of late US trade. Sugata added, however, that investors needed to watch long positions in the New York market.