Gold futures settled with a modest gain Thursday, finding support in the wake of sizable losses a day earlier as data showed that orders for core capital goods in the U.S. fell in September.
"The U.S. core durable number was soft and this took the shine of the durable good order data," said Naeem Aslam, chief market analyst at Think Markets UK. "Hence, there is still a strong demand for gold and it is holding on to gains."
Orders for durable goods increased 0.8% in September, the third gain in the last four months, the government said Thursday. Orders for core capital goods, closely watched by economists, fell 0.1%.
"Investors need to understand that the economic data over in the U.S. doesn't have the firepower anymore," said Aslam. "The tax cuts should have produced [a] more favourable number, but the data released today shows that we are not even close to that."
December gold GCZ8, +0.08% rose $1.30, or 0.1%, to settle at $1,232.40 an ounce, recouping a portion of the 0.5% it lost in the previous session. The yellow metal had settled Tuesday at $1,236.80-the highest for a most-active contract since mid-July, according to FactSet data.
December silver SIZ8, -0.03% however, eased back by 4.6 cents, or 0.3%, to $14.63 an ounce. It closed 0.8% lower in the session before.
Some upbeat data Thursday, however, limited gold's move higher. U.S. pending home sales edged up 0.5% to a reading of 104.6 in September, the National Association of Realtors said Thursday.
A popular measure of the ICE U.S. Dollar Index DXY, +0.06% was up 0.2% at 96.645, trading about 1% higher for the week. Commodities priced in dollars often trade inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of those commodities to holders of other currencies.
The recent downturn in U.S. stocks, however, has also helped to reassert gold's traditional haven status after a period of lackluster action in the precious metal. On Wednesday, both the S&P 500 and the Dow erased their year-to-date gains for 2018. The benchmark stock indexes staged a comeback Thursday, moving higher as gold prices settled.
"The crash of U.S. indices has given further fuel to gold," wrote Carlo Alberto De Casa, chief analyst at ActivTrades in a Thursday research note.
However, he cautioned that gold could lose momentum if stocks manage a resurgence. "This correction hasn't yet impacted the short term trend which remains positive after the weakness of stock markets, although a further decline below $1,220 could be seen as a negative signal," he wrote.
On Thursday, the European Central Bank offered no surprises, reaffirming its plan to end the asset-buying program at the heart of its quantitative-easing strategy in December provided data shows inflation remains on track to eventually meet its target. The ECB left interest rates unchanged.
In a speech, the central bank's President Mario Draghi said he believes risks to economic growth are still broadly balanced, according to Think Market's Aslam. It didn't sound like he is concerned much about the continuing issues taking place in Italy, he said. "On the outset, traders have taken the message as a more hawkish statement."
Among other metals traded on Comex Thursday, December copper HGZ8, -0.22% shed 0.1% to about $2.755 a pound. January platinum PLF9, -0.52% settled at $831.90 an ounce, up less than 0.1%.
December palladium PAZ8, -0.12% lost 2.2% to $1,087.60 an ounce after settling Tuesday at a record of $1,122.80.
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