Investing.com -- The price of gold futures slid below $1,200 a troy ounce on Thursday afternoon after China lowered its official economic growth target rate to the lowest level in more than two decades.
On the Comex division of the New York Mercantile Exchange, gold future prices for April delivery dropped $4.60 or 0.38% to $1,196.30 a troy ounce, before rallying to $1,198.40 in U.S. afternoon trading. The sharp decline on Thursday afternoon marked the second consecutive day that future prices for gold dropped at least $4.00 an ounce.
Futures were likely to find support at $1,194.60, the low from March 3, and resistance at $1,223.00, the high from March 2.
Prices remained fairly constant after China premier Li Keqian lowered the nation's economic growth rate to 7% from a 7.4% growth rate last year, in a report submitted to the National People's Congress. The 7% expansion would mark the lowest economic growth in China since 1990. China is the second-largest purchaser of the precious metal in the world behind India.
Also on Thursday, European Central Bank president Mario Draghi announced that it would begin its highly anticipated quantitative easing program on March 9. Draghi reiterated that the €60 billion a month program could last until September, 2016 or beyond if the central bank does not approach its target inflation rate of 2%.
Bond buying programs, such as quantitative easing, are pursued by policymakers as a way of stimulating the economy by driving up the market price of bonds. When bond prices increase, yields decrease lowering the rates for mortgages and other loans. If bond prices increase dramatically in the coming months, investors could consider gold as an alternative.
In the United States, meanwhile, traders awaited the release of Friday's monthly job report for the month of February. On Thursday, the U.S. Labor Department said the number of Americans filing new claims for unemployment increased to the highest level since May. Unemployment filings for the week that ended Feb. 28 rose by 7,000 last week to a seasonally-adjusted total of 320,000.
Meanwhile, silver futures for May delivery rose 0.049 or 0.30% to 16.203 a troy ounce.
Elsewhere on Comex, copper for May delivery fell 0.009 or 0.33% to 2.651.