Gold climbs in Europe

Gold prices climbed back above $1,460 an ounce on Thursday and silver also rose after US data showing an unexpected jump in jobless claims last week knocked the dollar. The precious metals came under pressure in earlier trade as speculation that some eurozone countries may be forced into debt restructuring weighed on the euro, but gold quickly rose back to session highs after the jobs numbers.
Spot gold was bid at $1,465.20 an ounce at 1355 GMT, against $1,454.61 late in New York on Wednesday. Silver was bid at $41.22 an ounce against $40.62, well off this week's 31-year high at $41.93 an ounce. Analysts are becoming concerned that the grey metal is becoming overbought at current levels, and may struggle to make significant headway from here.
"Silver needs to find support at $40 and gold around $1,450 in order to make additional headway," said Saxo Bank senior manager Ole Hansen. "(We) still like gold over time, but increasingly worried about silver." The dollar extended declines against the yen on Thursday, falling to a session low, after data showed initial US weekly jobless claims came in higher than expected.
The US Labour department said initial state jobless benefit claims rose to 412,000 in the latest week, from a revised 385,000 the prior week. Markets were expecting claims of 380,000. Gold hit record highs above $1,476 an ounce earlier this week, supported by dollar weakness, unrest in the Middle East and North Africa, and eurozone debt. But US monetary policy is expected to be the main driver of gold prices this year.
The dollar hit a 16-month low against a currency basket early on Thursday after Wednesday's US data did nothing to change the view the central bank would keep its $600 billion asset buying programme in place until June. Some analysts had suggested that if the economy were doing significantly better and inflation concerns picked up the Fed could rein in its second round of quantitative easing before it completes at the end of June. Analysts say this is now unlikely. "The debate over an early end to QE2 is finally subsiding, with the chances of an early end rapidly diminishing," said HSBC analyst James Steel in a note. "This is supportive of gold."
He said his bank's currency strategists believed "the complacency in the financial markets as regards US interest rates suggests that rates are likely to "stay lower for longer". This is also likely to work against the US dollar." Crude oil also swung higher, recovering earlier losses, after the jobless claims. Prices are at elevated levels due to continued unrest in the Middle East and a sharp fall in US gasoline stocks.
Holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, fell another 3.3 tonnes on Wednesday, reflecting softer investor interest in the funds. The amount of bullion the trust holds to back its securities has fallen 67.8 tonnes so far this year, against a rise of 7.4 tonnes in the same period of 2010. Holdings of the largest silver ETF, the iShares Silver Trust, slipped to 10,969.71 tonnes on Wednesday from 11,212.53 tonnes a day before. Platinum was at $1,772.99 an ounce against $1,769.15, while palladium was at $761.97 against $760.63.