Gold Ends Higher As Greek Woes Continue

(RTTNews) - Gold futures rebounded from a near seven-week low to end higher on Thursday, after reports emerged that Germany has rejected a proposal to extend Greece's bailout terms for just six months. The precious metal also found support after the Federal Reserve indicated no hurry to hike rates after the release of its minutes of January meeting.

The Greek financial woes continued to take center stage after Germany rejected Athens' proposal for an extension to its bailout funding program. German officials said Greece is only scheming to get another lifeline without fulfilling all the terms of its rescue package.

Yesterday's dovish Federal Reserve minutes are also helping gold prices rise after recent losses. The Fed minutes from the January meeting suggested policy makers were in no hurry to raise interest rates. However, the meeting did not take into account the blockbuster U.S. jobs report for January, which was released a few days later.

Gold for April delivery, the most actively traded contract, gained $7.40 or 0.6 percent to settle at $1,207.60 an ounce, on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for April delivery scaled an intraday high of $1,222.90 and a low of $1,206.30 an ounce.

On Wednesday, gold ended at $1,200.20 an ounce, down $8.40 or 0.7 percent, the lowest settlement since January 2. The precious metal dipped largely on a strong dollar and some downbeat U.S. economic data.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 767.96 tons on Thursday, from its previous close of 768.26 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.31 on Thursday, up from its previous close of 94.10 on Wednesday in North American trade. The dollar scaled a high of 94.44 intraday and a low of 93.84.

The euro trended lower against the dollar at $1.1375 on Thursday, as compared to its previous close of $1.1397 on Wednesday in North American trade. The euro scaled a high of $1.1452 intraday and a low of $1.1357.

On the economic front, a Labor Department report on Thursday showing that initial jobless claims in the U.S. pulled back more than expected in the week ended February 14, after reporting increases in first-time claims for unemployment benefits in the two previous weeks.

The report said initial jobless claims dropped to 283,000, a decrease of 21,000 from the previous week's unrevised level of 304,000. Economists had been expecting initial jobless claims to show a somewhat more modest decrease to a level of 290,000.

While the Federal Reserve Bank of Philadelphia released a report on Thursday showing continued growth in regional manufacturing activity in the month of February, the pace of growth unexpectedly slowed for the third consecutive month. The diffusion index for current general activity fell to 5.2 in February from 6.3 in January, although a positive reading indicates a continued increase in regional manufacturing activity. Economists expected the Philly Fed index to climb to a reading of 9.0.

A Conference Board report on Thursday showed its index of leading U.S. economic indicators increased modestly in January, suggesting a positive short-term outlook. The Board's leading economic index edged up by 0.2 percent in January following a downwardly revised 0.4 percent increase in December. Economists expected the index to rise by 0.3 percent compared to the 0.5 percent advance originally reported for the previous month.

The euro area current account surplus declined to a four-month low in December, the European Central Bank reported Thursday. The current account surplus dropped to EUR 17.8 billion in December from EUR 19.9 billion in November. This level was last seen in August.

French consumer prices declined for the first time since October 2009, the statistical office Insee said Thursday. Consumer prices fell more-than-expected 0.4 percent in January from last year, reversing a 0.1 percent rise in December. Prices were expected to drop 0.3 percent. This was the first decrease since October 2009 and matched the 0.4 percent drop seen in September 2009.