Gold price struggles for direction after U.S. data, ECB

New York (Sept 8)  Gold prices struggled for direction in North American trade on Thursday, as investors digested the latest U.S. data as well as comments from European Central Bank President Mario Draghi.

Gold for December delivery on the Comex division of the New York Mercantile Exchange inched up $1.05, or 0.09%, to trade at $1,350.35 by 9:05AM ET (13:05GMT). A day earlier, futures shed $4.80, or 0.35%.

The number of people who filed for unemployment assistance in the U.S. last week fell to a seven-week low, remaining in territory associated with a healthy labor market, official data showed on Thursday.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits decreased by 4,000 to 259,000 last week. Analysts expected jobless claims to rise by 2,000 to 265,000 from the previous week’s total of 263,000.

The data did little to alter market expectations for the next U.S. rate hike. According to Investing.com's Fed Rate Monitor Tool, investors are pricing in an 18% chance of a rate hike at the Fed's September 20-21 meeting. For December, odds stood at around 52%.

Gold is sensitive to moves in U.S. rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

Meanwhile, the ECB said it was maintaining its benchmark interest rate at a record-low 0.0%, in line with market expectations. The central bank also held its deposit facility rate unchanged at -0.4% and left its marginal lending at 0.25%.

The central bank expects rates to remain at present level or lower for an "extended period".

Additionally, the ECB kept the size of its monthly quantitative easing program at approximately €80 billion. The central bank reiterated that it is prepared to expand its monthly asset-purchase program beyond March 2017, if needed.

Source: Investing.com