New York 05/04/2012 - Gold futures bounced modestly on Thursday, supported by short-covering ahead of the Easter holiday weekend and a modicum of bargain hunting.

Gold futures for June delivery were last up $15.80 at $1,630.00 per ounce. Trade has ranged from $1,620.70 to $1,634.60.

“The panic caused by the Fed statements earlier this week has finally abated and it looks like we will be able to hold above $1,600,” a US-based gold trader said.

“But tomorrow is a bit of a strange day because most markets are closed but the government is still releasing its mega-important non-farm payrolls report,” he added. "Traders are now protecting positions by covering shorts just in case there's some sort of major surprise."

Nevertheless, there are still too many “shaky hands” in the market that need to be flushed out if the mood sours, Commerzbank AG warned.

“If sentiment among market players does not improve, we would not rule out the possibility of gold dipping below the $1,600 mark. That said, this price level would no doubt spark increased buying interest, which should prevent any sharper fall,” the broker said.

In data, US weekly unemployment benefit claims fell 6,000 last week to a seasonally adjusted 357,000. This was the fewest new claims since April 2008 and was in line with expectations.

In wider markets, the dollar climbed by about a cent to 1.3060 against the euro after Spanish 10-year yields blew out to 5.80 percent, the highest level since the EBC launched its longer-term refinancing operation (LTRO) in December.

Meanwhile, US equity markets drifted slightly lower, with the Dow Jones industrial average and S&P 500 were down 0.16 percent and 0.08 percent respectively.

In other precious metals, Comex silver for May delivery was up 56.6 cents at $31.615 per ounce. Trade ranged from $31.175 to $31.735.

Platinum futures for July delivery on the Nymex were up just $2.90 at $1,601.80 per ounce, while palladium for June delivery was at $637.70, up $4.45.


(Editing by Mark Shaw)

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