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 U.S. 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 percent.
A Labor Department report on Friday showed unemployment rate in the U.S. dropped to its lowest level in almost seven years, with employment in the U.S. increasing roughly in line with economist estimates in April. The unemployment rate at 5.4 percent 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 $6.70 or 0.6 percent to settle at $1,188.90 an ounce, on the Comex division of the New York Mercantile Exchange on Friday.
Gold for June delivery scaled an intraday high of $1,193.00 and a low of $1,180.50 an ounce.
On Thursday, gold futures dropped $8.10 or 0.7 percent to settle at $1,182.20 an ounce, on some better-than-expected initial claims for unemployment benefits in the U.S., amid speculation that a decent U.S. 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 U.S. 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 $1.1228 on Friday, as compared to its previous close of $1.1268 in North American trade late Thursday. The euro scaled a high of $1.1290 intraday and a low of $1.1182.
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 percent in April from 5.5 percent 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 U.S. rose less than expected in March, a report from the Commerce Department showed Friday. Wholesale inventories inched up 0.1 percent in March after rising by a downwardly revised 0.2 percent in February. Economists expected wholesale inventories to climb by 0.3 percent, 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 percent in April from last year in yuan terms, data from the General Administration of Customs showed Friday. Economists had forecast a 0.9 percent increase for April.
China’s imports registered a double-digit decrease of 16.1 percent annually, sharper than an expectation for a 8.4 percent drop. Consequently, the trade surplus came in at CNY 210.2 billion, below the consensus forecast of CNY 173.8 billion.
In U.S. dollar terms, exports were down 6.4 percent from a year ago, slower than March’s 15 percent decline. Exports were forecast to grow 1.6 percent. Imports declined 16.2 percent versus 12.7 percent fall in March. As a result, China’s trade surplus increased to $34.1 billion in April from $3.1 billion in March. The surplus was expected to rise to $39.6 billion.
Germany’s exports and imports growth exceeded expectations in March, with exports rising 1.2 percent month-on-month in March, much faster than the 0.4 percent rise forecast by economists. Nonetheless, this was slightly slower than the 1.4 percent rise seen in February.
German imports advanced 2.4 percent, while growth was expected to ease to 0.1 percent from 1.3 percent 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 percent in March after staying flat in February. Economists had forecast a 0.4 percent 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.
The material has been provided by InstaForex Company – www.instaforex.com