Investing.com - Gold futures rallied sharply on Thursday to climb above the key psychological USD1,400-level, as the U.S. dollar sold off against the yen and as Japan's Nikkei plunged more than 5% to enter correction territory.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,407.45 a troy ounce during European morning hours, up 1.15% on the day.
Comex gold prices rose by as much as 1.3% earlier in the session to hit a daily high of USD1,410.25 a troy ounce, the strongest level since May 22.
Gold futures were likely to find support at USD1,353.55 a troy ounce, the low from May 22 and near-term resistance at USD1,413.05, the high from May 22.
Gold's gains came as the dollar fell below a key support level to hit a three-week low against the yen, leading the greenback lower against all the other major currencies.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.25% to trade at 83.46, the weakest level since May 14.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Meanwhile, in Japan, the Nikkei sank 5.2% to hit a one-month low, boosting the safe-haven appeal of the precious metal.
Precious metals, which aren't as tied to economic cycles as are many commodities and equities, are frequently bought to diversify portfolios and guard against losses elsewhere.
Gold traders now looked ahead to the weekly U.S. report on jobless claims later in the global day amid ongoing speculation over whether the Federal Reserve is moving closer to scaling back its USD85 billion-a-month asset purchase program.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.
Elsewhere on the Comex, silver for July delivery added 0.5% to trade at USD22.57 a troy ounce, while copper for July delivery fell 0.3% to trade at USD3.286 a pound.
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