Gold gains on U.S. jobs data, though fiscal fears cap gains

Investing.com - Gold prices rose in U.S. trading Thursday after official data revealed fewer Americans sought initial jobless benefits than expected last week.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 0.29% at USD1,665.45 a troy ounce in U.S. trading, up from a session low of USD1,653.25 and down from a high of USD1,666.05 a troy ounce.

Gold futures were likely to test support USD1,636.45 a troy ounce, the low from Dec. 21, and resistance at USD1,668.45, Wednesday's high.

The U.S. Department of Labor said earlier the number of individuals filing for initial jobless benefits in the week ending Dec. 22 fell by 12,000 to a seasonally adjusted 350,000, lower than market calls for a decline of 2,000 to 360,000.

Jobless claims for the preceding week were revised up to 362,000 from a previously reported 361,000,

Continuing jobless claims in the week ended December 15 fell to 3.206 million.

Analysts were expecting that figure to fall to 3.200 million from last week’s revised figure of 3.238 million.

The news sent gold prices rising.

Fiscal uncertainty in the U.S., however, capped those gains by keeping many investors parked in the U.S. dollar.

Fears the U.S. will drive over the fiscal cliff grew after Senate Majority Leader Harry Reid, a Nevada Democrat, said earlier that Jan. 1 may come and go without a deal to prevent tax breaks from expiring and deep spending cuts from kicking in at the close of 2012.

President Barack Obama and Congress returned to work after the Christmas holidays on Thursday to discuss ways to avoid the fiscal cliff, though hopes continued to fade a deal may be struck in time, which boosted the greenback's appeal.

Meanwhile on the Comex, silver for March delivery was up 0.73% and trading at USD30.225 a troy ounce, while copper for March delivery was up 0.24% and trading at USD3.606 a pound.