Investing.com - Gold futures traded higher Thursday, advancing nearly 2% prior to falling back, as the release of disappointing U.S. data triggered hopes for a third round of monetary easing by the Federal Reserve.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,555.75 a troy ounce during U.S. trade, adding 0.45%.
It earlier rose by as much as 1.95% to trade at a two-day high of USD1,577.65 a troy ounce. Prices fell to as low as USD1,533.25 a troy ounce on Wednesday, the lowest since May 16, when prices touched a 2012 low of USD1,526.95.
Gold futures were likely to find support at USD1,526.95 a troy ounce, the low from May 16 and near-term resistance at USD1,598.95, the high from May 21.
Gold futures spiked to the highest levels of the session after the Commerce Department said U.S. core durable goods orders fell by a seasonally adjusted 0.6% in April, defying expectations for a 0.9% gain and dropping for the second consecutive month.
Total durable goods orders, which include transportation items, inched by a seasonally adjusted 0.2% in April, below expectations for a 0.5% gain.
A separate report from the U.S. Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell by 2,000 to a seasonally adjusted 370,000, in line with expectations.
Jobless claims have remained below 400,000, a level historically associated with an improving labor market, in 28 of the past 30 weeks, though lately claims have been pushing higher from the 350,000 associated with above-average job growth.
Gold investors will be closely watching U.S. data in the second quarter for clues as to the likelihood of a fresh round of monetary easing, which could potentially hurt the dollar and support gold.
The minutes of the central bank's April 24-25 meeting released last week stated that "several members" thought additional Fed support could be needed if the recovery lost momentum or if the risks to the economy became great enough.
Market talk that the European Central Bank could launch fresh liquidity measures further boosted the appeal of the yellow metal, after policymaker Ewald Nowotny said the central bank has not yet used its full arsenal.
Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
The renewed easing hopes weighed heavily on the U.S. dollar, as the euro clawed back from a 22-month low and the dollar index eased off the highest level since September 2010.
However, investors remained cautious after Wednesday’s summit of European Union leaders shed no new light on how the euro zone nations intend to tackle their debt crisis, including the threat of Greece's possible exit from the monetary union.
Elsewhere on the Comex, silver for July delivery soared 2.41% to trade at USD28.18 a troy ounce, while copper for July delivery added 0.81% to trade at USD3.42 a pound.