Gold Price Ends Higher After Jobs Data; Gains 1.2% For Week
Washington (May 8) Gold futures snapped a two-day loss to end higher on Friday, tracking rising global equity markets, with some better-than-expected jobs data from the US and unemployment rate dropping to a 7-year low. The data is seen as solid but not strong enough to put a June interest rate hike by the Federal Reserve back on the table.
For the week, gold futures gained about 1.2%.
A Labor Department report on Friday showed unemployment rate in the US dropped to its lowest level in almost seven years, with employment in the US increasing roughly in line with economist estimates in April. The unemployment rate at 5.4% was at its lowest since hitting a matching rate in May 2008 .
The report said non-farm payroll employment increased by 223,000 jobs in April compared to economist estimates for an increase of about 220,000 jobs.
It is now expected the strong jobs report will push the Federal Reserve to raise interest rates in either July or September.
Gold for June delivery, the most actively traded contract, gained USD6.70 or 0.6% to settle at USD1,188.90 an ounce, on the Comex division of the New York Mercantile Exchange on Friday.
Gold for June delivery scaled an intraday high of USD1,193.00 and a low of USD1,180.50 an ounce.
On Thursday, gold futures dropped USD8.10 or 0.7% to settle at USD1,182.20 an ounce, on some better-than-expected initial claims for unemployment benefits in the US, amid speculation that a decent US jobs report could put the Federal Reserve back on track to raise interest rates this summer.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, remained unchanged at 739.06 tons on Friday from its previous close.
The dollar index, which tracks the US unit against six major currencies, traded at 94.64 on Friday, up from its previous close of 94.61 on Thursday in late North American trade. The dollar scaled a high of 95.07 intraday and a low of 94.32.
The euro trended lower against the dollar at USD1.1228 on Friday, as compared to its previous close of USD1.1268 in North American trade late Thursday. The euro scaled a high of USD1.1290 intraday and a low of USD1.1182 .
On the economic front, a Labor Department said non-farm payroll employment increased by 223,000 jobs in April compared to economist estimates for an increase of about 220,000 jobs.
The overall job growth helped push the unemployment rate down to 5.4% in April from 5.5% in March, in line with economist estimates, the lowest level since May 2008 . However, the Labor Department also said the increase in employment in March was downwardly revised to 85,000 jobs from the previously reported 126,000 jobs.
Wholesale inventories in the US rose less than expected in March, a report from the Commerce Department showed Friday. Wholesale inventories inched up 0.1% in March after rising by a downwardly revised 0.2% in February. Economists expected wholesale inventories to climb by 0.3%, matching the increase originally reported for the previous month.
China's exports logged an unexpected drop on weak demand in April, with imports also declining more than expected adding to hopes of more economic stimulus. Exports fell 6.2% in April from last year in yuan terms, data from the General Administration of Customs showed Friday. Economists had forecast a 0.9% increase for April.
China's imports registered a double-digit decrease of 16.1% annually, sharper than an expectation for a 8.4% drop. Consequently, the trade surplus came in at CNY 210.2 billion , below the consensus forecast of CNY 173.8 billion .
In US dollar terms, exports were down 6.4% from a year ago, slower than March's 15% decline. Exports were forecast to grow 1.6%. Imports declined 16.2% versus 12.7% fall in March. As a result, China's trade surplus increased to USD34.1 billion in April from USD3.1 billion in March. The surplus was expected to rise to USD39.6 billion .
Germany's exports and imports growth exceeded expectations in March, with exports rising 1.2% month-on-month in March, much faster than the 0.4% rise forecast by economists. Nonetheless, this was slightly slower than the 1.4% rise seen in February.
German imports advanced 2.4%, while growth was expected to ease to 0.1% from 1.3% seen in February. As growth in imports outpaced export growth, the seasonally adjusted trade surplus dropped to EUR 19.3 billion from EUR 20 billion in February.
Germany's industrial production declined unexpectedly from February, adding to uncertainty about the economic expansion in the first quarter. Industrial production declined by 0.5% in March after staying flat in February. Economists had forecast a 0.4% rise for March.
The UK's visible trade gap narrowed to GBP 10.1 billion from GBP 10.8 billion in February, data from the Office for National Statistics showed Friday. Economists expected a smaller shortfall of GBP 9.8 billion.
Source: AllianceNews
