Commodities

A new poll of economists conducted by Reuters showed that experts predict US inflation to rise higher than expected previously. However, they believe the recovery won’t be hampered because interest rates will be held down until early next year.

Spot gold remained firm above $1,400 supported by physical demand in Asia.

Spot gold reached $1,413.75, just below a three-week high of $1,413.95 reached on Wednesday, before inching down to $1,412.74 an ounce.

U.S. gold futures were nearly flat at $1,413.3.

In the second-last trading day of the year, investors will keep their eye on the weekly initial jobless claims data from the United States, to gauge the health of the world's largest economy.

Gold went up on Thursday deals and it was expected to trade in a tight range as year end comes. However, dealers still expected some buying related to credit rating warnings in Europe.

Spot gold rose $2.56 an ounce to $1,387.11 an ounce by 0046 GMT. Gold was well below a historical high of around $1,430 hit earlier this month.

U.S. gold futures for February hardly changed at $1,387.4 an ounce.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings dropped to 1,288.616 tonnes by Dec. 22 from 1,298.029 tonnes on Dec. 21.

Gold prices remained little changed on Thursday supported by physical buying as the dollar was steady after optimistic US data while investors are watching a European Union summit that is expected to find solutions for the region's sovereign debt crisis for trading cues.

U.S. industrial production rose at its fastest pace in four months in November, implying a self-sustaining recovery is now entrenched, but a mild gain in consumer prices indicated still abundant slack in the economy.

Gold remained almost unchanged during Wednesday session as the market entered consolidation mode ahead of the year-end, but a rebound in dollar put pressure on the bullion.

The dollar edged up against a basket of major currencies early in Asia on Wednesday on upbeat U.S. retail sales data that prompted economists to lift their growth forecasts for the fourth quarter.

Gold moved up slightly in Thursday deals after it slipped more than 1% the previous session as a dollar rally paused, and resilient physical demand in Asia provided support.

The U.S. dollar weakened in Asia on Thursday but is still seen supported thanks to higher Treasury bond yields, after an agreement to extend tax cuts fed fears of inflation and a swelling deficit.

"The rise in U.S. treasury yield triggered some long liquidation in metals, not only in gold. If you look at the commodities as whole, there's profit-taking," said a Hong Kong-based trader.

As the US dollar strengthened gold prices slid below a lifetime high during Wednesday trades while silver on the other hand regained strength after holdings in the world's largest silver-backed exchange-traded fund hit another record.

U.S. government bond yields rose, lifting the dollar and weighing on commodities after President Obama proposed a deal on tax cuts and unemployment payments that could boost economic growth in the short term but raise debt levels longer term.

Gold advanced on Friday to its strongest in almost three weeks as bargain hunting helped the metal defy a rebound in the euro, waning Europe debt concerns and upbeat U.S. data.

The European Central Bank resisted pressure on Thursday to commit to a major bond-buying programme to contain the euro zone debt crisis, but traders said the ECB had been quietly buying bonds anyway.

Gold prices firmed during Thursday trades close to its highest in nearly three weeks hit the previous session, as worries about euro zone's fiscal crisis lingered despite hopes the European Central Bank and the United States would step in to help.

The European Central Bank is under pressure to unveil new steps to stabilise the euro zone when it meets on Thursday as the currency bloc battles a crippling debt crisis that has stoked contagion fears in the United States and Asia.

Gold shot up to its highest in more than two weeks on Wednesday as growing fears about Portugal's debt pummeled the euro, sending bullion priced in the single currency to a record high.

Standard & Poor's threatened to cut the credit ratings of Portugal, citing uncertainties stemming from the risk of the country having to seek international financial aid -- just after Ireland secured an 85 billion euros bailout package from the European Union.

During Monday trades gold prices recovered from its early drop which spurred buying from jewellers in Asia, but further gains could be limited by a rally in the U.S. dollar amid persistent euro zone debt concerns.

Investors also closely watched an escalating tension in the Korean peninsula, although dealers said there were no signs of buying related to the crisis sparked by North Korea's artillery attack on a southern South Korean island.

Gold prices remained steady on Wednesday as markets were waiting for further reports on the conflict in the Korean peninsula amid worries about the euro zone debt crisis.

"It's mainly safe-haven buying in gold after North Korea and South Korea exchanged fire yesterday, in addition to the buy-on-dip type," said Li Ning, an analyst at Shanghai CIFCO Futures.

"Gold is likely to revisit its record high at the end of this year or next year, thanks to strong demand, particularly from this region.

Gold remained steady on Tuesday as uncertainty if Ireland could secure a bailout supported prices.

Spot gold edged down 0.2 percent to $1,363.6 an ounce by 0034 GMT.

U.S. gold futures gained 0.4 percent to $1,363.3.

Political uncertainty in Ireland squashed initial euphoria over an EU/IMF bailout plan in the previous session, driving the dollar up against a basket of currencies.

Holdings in the iShares Silver Trust hit a record high of 10,841.98 tonnes, suggesting robust investment demand in the metals.

Gold rose during Monday trades as the euro recovered after Ireland's rescue deal, helping the metal resist pressure from China's move to tighten its economy.

China's steps to rein in inflation could dim gold's appeal in the world's second-largest consumer after India, but dealers said a drop in bullion prices from all-time high levels were attracting purchases from other consumers in Asia.

Gold prices moved up on Friday as concerns over Ireland's debt woes diminished and helped the euro strengthen against the dollar.

Spot gold gained half a percent to $1,359.65 an ounce by 0027 GMT, building on gains from the previous session.

U.S. gold futures also rose by half a percent, to $1,359.5.

Hopes that Ireland's debt crisis will be resolved soon lifted the euro against other major currencies.