Investing.com - Gold futures extended losses during U.S. morning trade on Thursday, after data showed that the number of people who filed for unemployment assistance in the U.S. last week fell unexpectedly.
On the Comex division of the New York Mercantile Exchange, gold for December delivery traded at $1,211.80 a troy ounce during U.S. morning hours, down $1.30 from a closing price of $1,215.50 on Wednesday.
Gold prices hit $1,204.30 on Tuesday, a level not seen since January 2.
Futures were likely to find support at $1,204.30, the low from September 30 and resistance at $1,232.70, the high from September 26.
Also on the Comex, silver for December delivery shed 23.9 cents to trade at $17.02 a troy ounce. Futures slumped to a four-year low of $16.85 on Tuesday.
The U.S. Department of Labor said in a report that the number of individuals filing for initial jobless benefits decreased by 8,000 last week to 287,000. Analysts had expected jobless claims to rise by 2,000 to 297,000 last week.
Investors now looked ahead to the release of the latest U.S. nonfarm payrolls report on Friday, for further indications on the strength of the recovery in the labor market.
Market analysts expect the data to show that the U.S. economy added 215,000 jobs in September, after a gain of 142,000 in August.
A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could boost gold by undermining the argument for an early rate hike.
Expectations that the Fed is growing closer to raising interest rates have boosted the dollar and weighed on precious metals in recent months.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Meanwhile, in the euro zone, the European Central Bank said it was maintaining its benchmark interest rate at a record-low 0.05%, in line with market expectations.
The central bank also held its marginal lending at 0.30% and left its deposit facility rate unchanged at -0.20%.
Speaking at the ECB’s post-policy meeting press conference, Mario Draghi said that the central bank will begin purchasing asset-backed securities in the fourth quarter of 2014, which will last for two years.
The ECB will also launch a covered bond purchasing program in mid-October, aimed at boosting inflation.
Elsewhere in metals trading, copper for December delivery dipped 3.2 cents to trade at $3.004 a pound.
Appetite for growth-linked assets weakened after a slew of disappointing manufacturing reports on Wednesday showed that factory activity in the U.S. slowed more than expected last month, Germany’s manufacturing sector slid into contraction territory for the first time in 14 months, while activity in China stalled.
Concerns over unrest in Hong Kong and a confirmed Ebola diagnosis in the U.S. also contributed to the risk-off mood.