Gold Stays Near $1100 As Dollar Struggles

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Gold prices extended record levels on Thursday as traders continued to turn to the safety of the precious metal. The metal gave back some early gains amid a dollar rebound.

December gold rose to $1,089.30, up $2 for the session. Prices reached as high as $1,095.20 earlier in the session.

Gold gave back its gains as the dollar recovered early loses against the pound and sterling and traded near its overnight levels. The European Central Bank and Bank of England both left their key interest rate levels unchanged.

Traders also reacted to the Federal Reserve's interest rate announcement, which was released after the close of floor trading yesterday. The Federal Open Market Committee said it was leaving its target for the federal funds rate at a range from zero and a quarter percent. The central bank also repeated its assessment that "exceptionally" low rates will continue for an "extended period."

On the economic front Thursday, the Labor Department reported productivity increased by 9.5 percent in the third quarter following a revised 6.9 percent increase in the second quarter. Economists had expected productivity to rise by 6.5 percent compared to the 6.6 percent growth originally reported for the previous quarter.

A separate Labor Department report showed that jobless claims fell to 512,000 from the previous week's revised figure of 532,000. Economists had been expecting jobless claims to edge down to 522,000 from the 530,000 originally reported for the previous week.

The Labor Department's big monthly jobs report is due at 8:30 a.m. ET Friday. A decline in non-farm payrolls of 175,000 is expected, compared to a drop of 263,000 a month earlier.

The unemployment rate is expected to edge up to 9.9%, compared to 9.8% a month earlier.

Wholesale inventory data is expected at 10 a.m. ET. A drop of 1% is expected for September, compared to a 1.3% slip in August.

Treasury Secretary Timothy Geithner is expected to be in attendance as the G20 finance ministers meet in St Andrews, Scotland.

(Market News Provided by RTTNews)