Gold Turns Back Toward $1,000 Amid Profit Taking

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Gold finished slightly lower, backing off the fresh 18-month high it reached earlier in the session. The dollar stabilized against other majors, cutting into gold's hedge appeal.

December gold fell to $1,012.30, losing $6.60 on the session. Prices touched as low as $1,010.60 earlier in the session.

Gold reached as high as $1,025.80 in overnight trading, approaching the record $1,033.90 reached in March 2008. When adjusted for inflation, however, gold moved near $2,000 back in 1980.

The dollar extended its lowest level against the euro in almost a year to 1.4766 against the euro before recovering its daily losses. The greenback also moved modestly higher against the pound.

On the economic front, the U.S. Labor Department revealed that initial jobless claims came in at 545,000 for the week ended September 12. This was down 12,000 from the previous week's revised total. Economists had expected claims to rise to about 575,000.

Meanwhile, a Commerce Department showed that housing starts rose 1.5 percent to an annual rate of 598,000 in August from the revised July estimate of 589,000. With the increase, housing starts rose to their highest rate since coming at 655,000 in November of 2008.

Later, the Philly Fed said its index of manufacturing activity rose to 14.1 in September from 4.2 in August, with a positive reading indicating growth in the sector. Economists had been expecting a more modest increase by the index to a reading of 8.0.

Friday's calendar is light, leaving traders to peek ahead at the Federal Open Market Committee's interest rate decision on Wednesday.

(Market News Provided by RTTNews)