Gold retreated 2 percent from a new record high on Thursday, as upbeat news on US jobless benefits shored up the dollar and prompted gold longs to secure profits before Friday's US employment report. New US claims for unemployment benefits, a precursor to Friday's September Labour Department nonfarm payrolls report, fell to a near three-month low last week, decreasing gold's appeal as a safe-haven investment.
"People just want to take some profits off the table before the nonfarm payrolls report. The gold market has been overdone, and we have gone so far in such a short period of time, so a correction is inevitable," said Bruce Dunn, vice president of trading at Auramet Trading LLC. But even as gold posted its biggest percentage loss since late July, its price was set for the fourth straight week of gains.
Thursday's relatively upbeat report did not change perceptions the Federal Reserve will roll out a new asset purchasing program as early next month to keep interest rates low and support the economic recovery, a process known as quantitative easing. Spot gold fell 0.8 percent to $1,335.35 an ounce at 2:50 pm EDT (1850 GMT), and was off 2.1 percent from its new high of $1,364.60 set early in the day as the euro rose to an eight-month high above $1.40.
US gold futures for December delivery settled down $12.70 at $1,335. Volume was about 255,500 lots, the highest since late July and more than doubled its 30-day average, preliminary Reuters data showed. COMEX gold open interest climbed 4,737 contracts to a record high 621,941 lots as of Wednesday, according to exchange data.
Gold, has gained as much as 10 percent in the same period, with its inverse correlation with the dollar appearing to strengthen. Spot silver hit a new 30-year high at $23.51 an ounce but was quoted at the end of the day down 2.2 percent at $22.62. The platinum group metals were mixed. Spot platinum rose to $1,725.50, its highest since mid-May and was trading down 0.1 percent on the day at $1,693, while palladium hit a new nine-year peak at $602.50, and it gained 0.9 percent to $584.00.