Gold Ends Sharply Lower After Strong US Jobs Data
Washington (Dec 5) Gold futures ended sharply lower for a second straight session on Friday, after some strong jobs data from the US with November recording the most number of jobs created in nearly three years, reflecting the economy to be in a better shape than previously estimated.
Investors also opted for the riskier equity assets with most global markets on the up, even as the crucial jobs data had the dollar ticking higher at multi-year highs against some select major currencies.
In some upbeat data from the US, a report from Labor Department on Friday showed employment increased much more than anticipated in November, even as job growth for the two previous months also revised upward. Unemployment rate remained unchanged as expected.
However, there were a couple of disappointing reports, but with little or no impact on the precious metal.
Disappointingly, new orders for US manufactured goods fell more than expected in October, reflecting a sharp drop in non-durable goods orders, a Commerce Department report showed Friday.
Meanwhile, US trade deficit narrowed in October with exports rising more than imports, but still came in much wider than economists anticipated, a Commerce Department report said Friday.
Gold for February delivery, the most actively traded contract, plunged USD17.30 or 1.4% to settle at USD1,1190.40 an ounce on the Comex division of the New York Mercantile Exchange on Friday.
Gold for February delivery scaled an intraday high of USD1,208.50 and a low of USD1,186.40 an ounce.
On Thursday, gold futures ended lower at USD1,207.70 an ounce, down USD1.00 or 0.1%, after some upbeat US economic data showed a bigger than expected drop in initial jobless claims last week. Comments from European Central Bank President Mario Draghi that additional stimulus measures would be considered only next year also impacted the precious metal.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, remained unchanged at 720.02 tons on Friday, from its previous close of 717.63 tons.
The dollar index, which tracks the US unit against six major currencies, traded at 89.29 on Friday, up from its previous close of 88.60 late Thursday in North American trade. The dollar scaled a high of 89.47 intraday and a low of 88.58.
The euro trended lower against the dollar at USD1.2297 on Friday, as compared to its previous close of USD1.2379 late Thursday in North American trade. The euro scaled a high of USD1.2392 intraday and a low of USD1.2272 .
In economic news from the US, the economy added 321,000 jobs in November, the biggest addition in nearly three years, beating forecast for an increase of 230,000. Meanwhile, the unemployment rate remained unchanged at 5.8% for the month, in line with expectations.
The report also said average hourly employee earnings climbed by 9 cents to USD24.66 in November, with two soft reading previously. Nevertheless, the 12-month growth just about inched up to 2.1% from 2.0%.
Loretta Mester , president of the Cleveland Fed, reacting to the strong jobs data said the Federal Reserve will not overreact to November's blockbuster job report. "As the economy continues to improve, as we've seen, then I would think we would be raising rates sometime in 2015," Mester observed.
Data released by the Commerce Department showed US trade deficit to have narrowed less than expected to USD43.4 billion in October from USD43.6 billion in September.
In economic news from eurozone, German factory orders were up by a seasonally adjusted 2.5% in October. following a 1.1% gain in September.
In economic news from eurozone, a report from Eurostat said the euro area GDP grew 0.2% sequentially in the third quarter following a 0.1% rise in the prior quarter.
Growth in global emerging markets slowed further in November, a survey from Markit Economics showed Friday. The HSBC Emerging Markets Index fell to 51.2 in November from 51.5 in October. However, the EMI remained well below its long-run trend level of 53.7 and 2014 looks set to record the lowest annual average for the index since its inception in November 2005