Gold slipped nearly 1 percent on Thursday, erasing most of this week's gains, as the dollar rose to a three-week high against the euro after a raft of US data and amid persistent concerns over eurozone debt levels. Spot gold fell as low as $1,372.05 an ounce and was bid at $1,377.49 an ounce at 1610 GMT, against $1,384.55 late in New York on Wednesday. US gold futures for February delivery fell $9.00 to $1,378.30.
US data showed first-time claims for jobless benefits barely moved last week, suggesting the labour market is healing too slowly to cut unemployment. Other reports showed US consumer spending rose for a fifth month in November and incomes climbed by more than expected, while a rise in new orders for US manufactured goods excluding transport also beat expectations.
That correlation weakened this year as to developments in the gold price, analysts said. "This year it's been a mixed bag with gold trading inversely to the US dollar," said Jeff Pritchard, an analyst and broker at Altavest Worldwide Trading. "But as the US debt becomes more and more of a focus, as it has to at some point there is going to be more and more uncertainty in the US dollar. That will drive people into other assets, and gold will definitely be one of them."
Thursday's correction notwithstanding, gold is still heading for its first weekly rise in three. Its haven appeal rose after ratings agency Fitch said it may cut Greece's foreign currency rating and Moody's threatened to downgrade debt-ridden Portugal. Among other precious metals, platinum was at $1,712.99 an ounce against $1,721.50, while palladium was at $748.97 against $748.25. Silver was at $29.21 an ounce against $29.20.
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