Gold prices find little support after recent losses

San Francisco (May 8)  Gold futures wavered between minor losses and gains on Thursday, finding little support after the previous session’s 1.5% loss, as traders assessed the prospects for the U.S. economy and developments in Ukraine.

Federal Reserve Chairwoman Janet Yellen was appearing before the Senate Budget Committee, Thursday. Her generally upbeat comments on the economy during testimony before the Economic Committee of Congress a day earlier contributed to gold’s 1.5% loss on Wednesday.

Gold for June delivery  was last down $1.40, or 0.1%, at $1,287.50 an ounce on the Comex division of the New York Mercantile Exchange.

July silver  also lost 12 cents, or 0.6%, to $19.22 an ounce after a 1.5% decline in the previous session.

“For now, gold is trading under pressure and we expect this pressure to continue as long as we are below the $1,300 mark,” said Naeem Aslam, chief market analyst at AvaTrade.

The U.S. economic data released Thursday has further strengthened the case for the bulls that the economy is on firm footing and the job market is on a contestant upward trend, he said. “This translates a possibility of more aggressive measures when it comes to tapering [of the Federal Reserve’s bond-buying program] or at least keeping the same pace of tapering till this ends, which is by fall this year.”

The number of people who applied for new U.S. unemployment benefits last week fell by 26,000 to 319,000 — the lowest level in a month.

In Europe, Mario Draghi, president of the European Central Bank, opened the door for more easing at the central bank’s next policy meeting.

In his speech, Draghi has also shown “serious concerns about the geopolitical tensions [in Ukraine], but safe-heaven demand [for gold] has still not picked up.”

On Thursday, the Russian defense ministry said about 15,000 Ukrainian troops have assembled near the border with Russia, according to Russian news agency Interfax.

“The geopolitical tensions could provide the life line for the gold bulls, and as of today, once again Mr. Putin is still not respecting his words,” said Aslam. “If things do get out of hand then we may have a strong possibility of another leg up in gold.”

“So far it appears that we are no where close to find a solution for this geopolitical tension which could move the gold up but traders are obviously not factoring this in for the time being and are more focused to overall growth story,” he said.

Elsewhere in metals trading, July platinum gave up $6.80, or 0.5%, $1,428 an ounce, while June palladium   added $6.65, or 0.8%, to $803.35 an ounce. High-grade copper for July   delivery rose more than 2 cents, or 0.8%, to $3.06 a pound after a 0.8% loss a day earlier.

Gold and silver miners were modestly lower Thursday moring, with the Philadelphia Gold and Silver Index  down 0.2%. The SPDR Gold Trust  traded 0.1% lower.