Gold Ends Above $1,200 As Economic Data Disappoints
New York (Dec 3) Gold futures rebounded to end higher on Wednesday, after a slew of some disappointing global economic data, including private sector jobs in the U.S. that rose short of expectations.
Investors sought the safe haven appeal of the precious metal even as the dollar continued to strengthen against a basket of major currencies.
In some soft data from the U.S., labor productivity rose more than previously estimated in the third quarter, although the upwardly revised increase came in below expectations.
A report from payroll processor ADP showed a notable increase in U.S. private sector employment in November, although the pace of growth in the sector came in short of estimates.
From the eurozone, private sector growth in November was at its weakest in 16 months, slightly less than previously estimated, as new orders declined for the first time in over a year.
However, there was some positive news from the U.S., as service sector activity accelerated more than anticipated in November, with the index of activity rebounding after falling in the two previous months.
Gold for February delivery, the most actively traded contract, gained $9.30 or 0.8 percent to settle at $1,208.70 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.
Gold for February delivery scaled an intraday high of $1,215.00 and a low of $1,193.50 an ounce.
On Tuesday, gold futures ended lower at $1,199.40 an ounce, down $18.70 or 1.5 percent, on a strong dollar and some weak data from eurozone, including a report showing eurozone area producer prices to have declined at its fastest in 18 months in October.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved up to 720.02 tons on Wednesday, from its previous close of 717.63 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 88.97 on Wednesday, up from its previous close of 88.63 late Tuesday in North American trade. The dollar scaled a high of 89.01 intraday and a low of 88.58.
The euro trended lower against the dollar at $1.2304 on Wednesday, as compared to its previous close of $1.2383 late Tuesday in North American trade. The euro scaled a high of $1.2390 intraday and a low of $1.2302.
In economic news from the U.S., a report from payroll processor ADP showed a notable increase of 208,000 jobs in private sector employment in November. However, that was less than economists' forecast for an increase of 225,000 jobs.
A report from the Institute for Supply Management showed U.S. service sector activity to have accelerated much more than anticipated in November, with the non-manufacturing index jumping to 59.3 in November, from 57.1 in the preceding month.
A report from the U.S. Labor Department showed labor productivity to have increased by an upwardly revised 2.3 percent in the third quarter, compared to the previously reported 2.0 percent growth.
The services sector in China continued to expand at a slightly faster rate in November, the latest data from HSBC Bank revealed on Wednesday, with a PMI score of 53.0, up marginally from 52.9 in October.
Eurozone's private sector growth in November signaled growth for the seventeenth month in a row, final figures of a survey by Markit Economics revealed Wednesday. The Composite Purchasing Managers' Index dropped to 51.1 from 52.1 in October. The flash estimate for the November was 51.4.
Eurozone retail sales rebounded in October after a decline in the previous month, but fell short of economists' expectations, data from Eurostat revealed. Retail sales grew 0.4 percent in October from a decline of 1.2 percent in September, revised from 1.3 percent. Economists expected a 0.5 percent increase for October.
Germany's private sector growth slowed more than expected in November to its lowest level in 17 months, survey results from Markit Economics revealed Wednesday. The Composite Output Index declined to 51.7 from October's 53.9. The flash estimate for the index was 52.1.
The services sector in Japan swung back to expansion in November, a survey from Markit Economics showed on Wednesday, with a PMI score of 51.2, up from 48.7 in October.