Gold Prices Extend Losing Streak as Dow Nears High (Update 1)
NEW YORK ( TheStreet) -- Gold prices were sliding Thursday, the last day of February, as the Dow Jones Industrial Average headed towards its all-time closing high of 14,164.53. Gold dropped 1.2% on Wednesday as equities soared .
Gold for April delivery dropped $17.60 to settle at $1,578.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,602.50 and as low as $1,574.30 an ounce, while the spot price was shedding $19.10, according to Kitco's gold index.
European Central Bank President Mario Draghi asserted status quo policy moving forward as he pointed out that the bank would remain committed to price stability -- an answer to critics who have said the ECB is doing either too much or too little.
"The thing that the gold market is looking at right now is, they is just competing assets: the stock market is near a five-year high ... European stocks were firmer today, the Japanese and Asian stocks have rallied recently," Jim Wyckoff, senior metals analyst at Kitco.com, said in an interview. "The European Union sovereign debt crisis was back on the front burner earlier this week; that situation seemed to have calmed down a bit."
Silver prices for May delivery were dropping 24 cents to $28.75 an ounce, while the U.S. dollar index was jumping 0.31% to $81.82.
Domestic economic indicators showed continued recovery, which likely was adding to the slight downward pressure on gold prices.
The Labor Department reported that initial jobless claims for the week ended Feb. 23 were 344,000, a drop of 22,000 from the previous week . Economists were expecting claims to hit 360,000.
The Federal Reserve has pegged its policy to maintain low interest rates to an unemployment rate that holds at or above 6.5%. Any indication that the labor market is rapidly approaching that target would suggest the likely conclusion to low rates and the highly accommodative monetary stance.
Chicago PMI rose to 56.8 in February from January's 55.6. February's number was higher than economists' expectation for the index to fall to 54.
The Bureau of Economic Analysis released its second estimate of fourth-quarter 2012 gross domestic product and found that the economy grew slightly by 0.1%. This was a slight uptick from the first reading, which noted that the economy had contracted by 0.1%.
Among volume leaders, Newmont Mining (KGC) was slipping 1.2%
-- Written by Joe Deaux in New York.