By Myra P. Saefong and Saumya Vaishampayan,

By Myra P. Saefong and Saumya Vaishampayan, MarketWatch

SAN FRANCISCO (MarketWatch) -- Gold prices scored their first gain in four sessions on Thursday as investors looked to data on the economy for cues on the precious metal's outlook.

Gold for February delivery (GCG4) tacked on $3.90, or 0.3%, to settle at $1,229.40 an ounce on the Comex division of the New York Mercantile Exchange after touching lows under $1,223. Prices had tallied losses of roughly 1% over the past three trading sessions.

March silver (SIH4) also added 14 cents, or 0.7%, to end at $19.68 an ounce after Wednesday's 1.3% decline.

Initial jobless claims for the week ended Jan. 4 dropped by 15,000 to 330,000, a five-week low, according to data released Thursday. Upbeat economic data tends to dull gold's appeal as a safe-haven investment. Gold prices had been struggling to establish a direction for much of the trading session.

But traders awaited Friday's nonfarm payrolls data for the latest monthly view on the employment situation. Naeem Aslam, chief market analyst at AvaTrade expects the report to be strong "and this could trigger a sell off for gold," as aggressive tapering of the Federal Reserve's bond-buying program "could be hitting the tapes earlier than expected."

Minutes from the December Fed meeting released Wednesday showed central-bank officials were in broad agreement over last month's decision to start reducing the asset-purchase program, as most believed the policy was losing its punch.

In a recent interview with Time Magazine, New Federal Reserve Chief Janet Yellen said she sees stronger economic growth this year.

Yellen's comments imply that "gold may not find favor among short-term investors to medium-term investors as a strong U.S. economy will result in investors remaining invested in equity markets and will use [the] rise in gold prices to exit their gold investment," said Chintan Karnani, chief market analyst at Insignia Consultants.

Big banks offer downbeat forecasts

Bank of America Merrill Lynch on Thursday chopped its gold price forecast by 11%, now expecting $1,150 an ounce in 2014 on concerns about a lack of buyer interest.

""If investors stopped selling gold, prices could stabilize around $1,200/oz. Yet, this is not our base case and a more likely scenario is for investors to continue reducing their exposure. Our models suggest that this could take prices down to $1,000/oz," said Michael Widmer, a strategist at Bank of America Merrill Lynch, in the research note.

The bank also lowered its outlook for silver by 21% to $18.38 an ounce. In November, it had predicted $1,294 an ounce for gold and $26.38 an ounce for silver in 2014.

Barclays, MKS Group and HSBC also offered downbeat views on the outlook for gold. Barclays sees an average price of $1,205 for gold in 2014, with a low of $1,050 and a high of $1,375.

The European central bank meeting Thursday did not have any surprises for the market. Accommodative monetary policy will continued to be pursued by European central bank for a large part of the year.

In Frankfurt, European Central Bank President Mario Draghi discussed the region's low inflation in a dovish press conference following the bank's decision to hold interest rates steady. The euro (EURUSD) swung to a slight loss against the dollar in recent trade.

On Wednesday, gold futures settled lower for a third consecutive session as data showed that the private sector in December added the most jobs in more than a year, which helped buoy the U.S. dollar.

Elsewhere in metals trading, platinum for April delivery (PLJ4) added $5.70, or 0.4%, to $1,419.90 an ounce, while March palladium (PAH4) inched down $1.80, or 0.2%, to $736.50.

High-grade copper for March delivery (HGH4) shed 4 cents, or 1.3%, to $3.30 a pound.

Metals-mining companies traded mostly lower, tracking overall losses among equities. The Philadelphia Gold and Silver Index (XAU) fell 1.2%. Among the standouts, Allied Nevada Gold Corp. (ANV) saw its stock rally 10% after the company reported record sales and production levels for the fourth quarter and full year 2013.

The gold-backed SPDR Gold Trust exchange-traded fund (GLD) tacked on 0.3%.

Other must-read MarketWatch stories:

HSBC, MKS Barclays downbeat on gold's outlook for 2014

White House says 'polar vortex' likely caused by global warming

3 'clean tech' companies poised for 2014 IPOs

China consumer inflation eases

-Myra P. Saefong; 415-439-6400; AskNewswires@dowjones.com

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01-09-141436ET