Gold edged higher on Thursday as a in the dollar took some pressure off the precious metal its slump to four-year lows, but prices remained ahead of a European Central Bank policy statement in the day.
A surge in the dollar, in which gold is priced, has knocked metal in recent days through key chart support at $1,180 an—the lowest level hit during last year's 28 percent—and $1,155 to its lowest since early 2010 at $1,137.40.
Technical analysts have said that a test of the $1,000 level could be on the cards after a break of support at $1,155, a key level of its rally to record highs in 2011.
ticked up 0.2 percent to $1,143 an ounce. It tumbled over 2 percent to a 4-1/2 year low of $1,137.40 on Wednesday, following sharp losses after falling through support at $1,160 and $1,150. U.S. gold futures for December delivery were down by nearly $4 an ounce to $1,142.
Silver prices were also battered, tumbling more than 4 percent on Wednesday, their biggest one-day retreat in more than a year, at one point hitting a 4-1/2 year low of $15.13. It was down 0.3 percent at $15.29 an ounce.
``We have the ECB today, and tomorrow the payrolls data in United States, so this stabilization is to be expected after big move we've seen,'' ABN Amro analyst Georgette Boele said.
``However, we think this is just a pause and we will see more ahead, mainly because of the dollar but also because of that interest rates will start to move up.''
Gold tends to benefit from the kind of ultra-low interest in place since the start of the 2008 financial crisis they cut the opportunity cost of holding the-yielding asset.
The dollar steadied on Thursday after hitting a seven-year versus the yen. The dollar index pared earlier losses and was last up 0.6 percent.