Investing.com - Gold futures held on to gains on Thursday, after European Central Bank President Mario Draghi confirmed that interest rates would remain at present or lower levels for an extended period of time.
Sentiment on the precious metal was also upbeat after the Federal Reserve gave no indications on whether it will begin to taper its stimulus program in the near future.
Moves in the gold price this year have largely tracked shifting expectations as to whether the Fed would end its quantitative easing program sooner-than-expected.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,322.15 a troy ounce during U.S. morning hours, up 0.7%.
Gold futures were likely to find support at USD1,306.05 a troy ounce, Tuesday's low and resistance at USD1,346.15, the high from July 24.
Speaking at the ECB's post-policy meeting press conference, Draghi said that the central bank's monetary policy will remain accommodative "for an extended period of time".
Draghi's comments came after the ECB held its benchmark interest rate at a record low 0.50% in August, in line with expectations.
Meanwhile, the Fed said on Wednesday that it would keep buying USD85 billion a month in mortgage and Treasury securities and gave no hint of plans to pare its USD85 billion-a-month bond purchase program.
Market players now looked ahead to highly-anticipated data on U.S. nonfarm payrolls due on Friday for indications of how the recovery in the U.S. labor market is progressing.
Data released earlier Thursday showed that the number of people who filed for unemployment assistance in the U.S. fell to the lowest level since January 2008 last week.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 26 fell by 19,000 to a seasonally adjusted 326,000.
Jobless claims for the preceding week were revised up to a gain of 345,000, from a previously reported 343,000.
Analysts had expected U.S. jobless claims to hold steady at 345,000 last week.
Investors have closely been looking out for data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
The December contract settled down 0.9% at USD1,313.0 a troy ounce on Wednesday after official data showed that the U.S. economy grew more-than-expected in the second quarter of 2012.
The Commerce Department said that gross domestic product grew at a seasonally adjusted annual rate of 1.7% in the three months to June, beating expectations for growth of 1%.
The robust GDP data came after payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 200,000 in July, above expectations for an increase of 180,000.
Any improvement in the U.S. economy was likely to reinforce the view that the Federal Reserve will begin to taper its bond purchase program in the coming months.
The precious metal is on track to post a loss of 21% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.
An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.
Elsewhere on the Comex, silver for September delivery rose 0.5% to trade at USD19.73 a troy ounce, while copper for September delivery rallied 1.6% to trade at USD3.169 a pound.
The red metal was supported following the release of stronger-than-expected data on manufacturing activity out of the euro zone and China.
Data released earlier showed that July's euro zone manufacturing purchasing managers' index improved to a two-year high of 50.3 from 48.8 in June.
Germany's manufacturing PMI was revised up to an 18-month high of 50.7 in July from a final reading of 48.6 in June and above the preliminary reading of 50.3.
Meanwhile, in China, a government report showed that China's manufacturing purchasing managers' index rose unexpectedly to 50.3 in July from 50.1 in June.
A reading above 50.0 indicates industry expansion, below indicates contraction.
China is the world's largest copper consumer, accounting for almost 40% of world consumption last year.
Investing.com - Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com or Follow us on Twitter at @ InvestingCom