Gold Ends Lower As Dollar Strengthens
Washington (Mar 4) Gold futures ended lower for a third straight session on Wednesday, as the dollar trended higher against a basket of some major currencies after some mixed economic data with some disappointing private jobs data from the US Meanwhile, investors await the key employment report on Friday and the upcoming European Central Bank meet.
A report from payroll processor ADP on Wednesday showed solid private sector jobs growth of above 200,000 in February, although the pace of growth was notably slower when compared to the previous month.
The strong dollar and expectations of an interest rate hike in June by the Federal Reserve have kept precious metal prices in check for the past month.
Gold for April delivery, the most actively traded contract, dropped USD3.50 or 0.3% to settle at USD1,200.90 an ounce, on the Comex division of the New York Mercantile Exchange on Wednesday.
Gold for April delivery scaled an intraday high of USD1,208.40 and a low of USD1,197.70 an ounce.
On Tuesday, gold ended at USD1,204.40 an ounce, down USD3.80 or 0.3%, ahead of the vital US non-farm payroll data and the upcoming European Central Bank meet.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, edged down to 760.80 tons on Wednesday, from its previous close of 769.49 tons on Tuesday.
The dollar index, which tracks the US unit against six major currencies, traded at 95.99 on Wednesday, up from its previous close of 95.37 on Tuesday in late North American trade. The dollar scaled a high of 96.06 intraday and a low of 95.32.
The euro trended lower against the dollar at USD1.1074 on Wednesday, as compared to its previous close of USD1.1176 on Tuesday in late North American trade. The euro scaled a high of USD1.1188 intraday and a low of USD1.1063 .
On the economic front, a report from payroll processor ADP on Wednesday showed solid private sector jobs growth of above 200,000 in February, although the pace of growth was notably slower when compared to the previous month. ADP said private sector employment increased by 212,000 jobs in February compared to an upwardly revised jump of 250,000 jobs in January. Economists had expected an increase of about 220,000 jobs compared to the addition of 213,000 jobs originally reported for the previous month.
Activity in the US service sector unexpectedly grew at a slightly faster rate in February, a report from the Institute for Supply Management showed Wednesday. The ISM said its non-manufacturing index inched up to 56.9 in February from 56.7 in January, with a reading above 50 indicating an expansion in service sector activity. Economists expected the index to edge down to 56.5.
China's service sector expansion accelerated slightly in February, led by solid rise in new work, results of a survey by Markit Economics and HSBC showed Wednesday. The services business activity index rose slightly to 52.0 in February from January's six- month low of 51.8.
The Eurozone private sector expanded in February albeit at a slower than initially estimated pace, survey data from Markit Economics showed Wednesday. The composite output index rose to 53.3 in February from 52.6 in January. The reading was slightly below the flash score of 53.5.
Eurozone retail sales growth accelerated unexpectedly in January on both food and non-food turnover, Eurostat reported Wednesday. Retail sales were up 1.1% on a monthly basis, faster than a revised 0.4% growth in December. The monthly growth rate was forecast to ease to 0.2% from December's originally estimated growth of 0.3%.
The UK service sector expansion slowed unexpectedly in February, survey data from Markit showed Wednesday. The Markit/Chartered Institute of Purchasing and Supply Purchasing Managers' Index for the service sector decreased to 56.7 in February from 57.2 in January. The score was forecast to rise to 57.5. This marked the twenty-sixth month of expansion.
Shop prices in the UK declined at a faster rate in February, defying expectations for a slower drop, the British Retail Consortium said on Wednesday. Shop prices fell 1.7% year-over-year after the 1.3% drop in January. Economists expected a 1.2% drop.