Gold futures rebounded to end higher on Thursday, after dropping to its lowest level in April, as the dollar trended lower against a basket of some select major currencies on weak new home sales and unemployment benefit claims data from the U.S.
In some soft economic news, first-time claims for U.S. unemployment benefits rose unexpectedly last week, a report from the Labor Department showed Thursday. As well, new home sales in the U.S. pulled back much more than expected in March, after having reported a notable increase in the previous month.
Signs of strength in the U.S. economy bolstered stocks and diminished the appeal of safe haven investments such as gold in recent weeks.
Gold for June delivery, the most actively traded contract, gained $7.40 or 0.6 percent to settle at $1,194.30 an ounce, on the Comex division of the New York Mercantile Exchange on Thursday.
Gold for June delivery scaled an intraday high of $1,195.20 and a low of $1,183.60 an ounce.
On Wednesday, gold futures dropped $16.20 or 1.4 percent to settle at $1,186.90 an ounce, with investors opting for the riskier equity assets after some upbeat economic data from the U.S. with existing home sales in March surging much more than expected to an 18-month high.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged at 742.35 tons from its previous close of 739.06 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.18 on Thursday, down from its previous close of 98.07 on Wednesday in late North American trade. The dollar scaled a high of 98.43 intraday and a low of 97.17.
The euro trended higher against the dollar at $1.0842 on Thursday, as compared to its previous close of $1.0725 in North American trade late Wednesday. The euro scaled a high of $1.0845 intraday and a low of $1.0668.
On the economic front, first-time claims for U.S. unemployment benefits unexpectedly increased with initial jobless claims rising up to 295,000, an increase of 1,000 from the previous week’s unrevised level of 294,000. Economists expected jobless claims to dip to 290,000.
After reporting a notable increase in new home sales in the U.S. in the previous month, a Commerce Department report on Thursday showed new home sales to have pulled back much more than expected in March. New home sales plunged 11.4 percent to an annual rate of 481,000 in March after jumping 5.6 percent to a revised rate of 543,000 in February. Economists expected new home sales to drop to an annual rate of 518,000 from the 539,000 originally reported for the previous month.
China’s factory activity moved further into negative zone in April, logging the weakest operating conditions in a year, flash estimate released by Markit Economics showed Thursday. The HSBC manufacturing Purchasing Managers’ Index fell to 49.2 in April, a 12-month low, from 49.6 in March. It was expected to remain at 49.6.
Eurozone private sector growth pulled back from March’s 11-month high in April as concerns over Greece crisis started to weigh on economic activity despite the boost from the European Central Bank’s quantitative easing. The flash composite output index fell unexpectedly to 53.5 in April from 54 in March, according to the purchasing managers’ survey results published by Markit Economics. The expected score was 54.4.
Germany’s private sector growth moderated at the start of the second quarter, survey data from Markit Economics showed Thursday. The flash composite output index fell to 54.2 in April from an eight-month high of 55.4 in March. The latest index reading was still the second-strongest since last September.
The French private sector growth weakened to near stagnation in April as manufacturing continued to shrink, flash survey data from Markit showed Thursday. The flash composite output index fell to 50.2 in April, a 3-month low, from 51.5 in March, signaling a fractional increase in output.
Germany’s consumer confidence is set to rise further to the strongest level since October 2001, survey data from the market research group GfK showed Thursday. The forward-looking consumer climate index rose to 10.1 points in May from 10 in April. This was its highest value since October 2001, when the indicator was at 11.0 points.
French manufacturing confidence improved more than expected in April to the highest level since August 2011, survey data from the statistical office Insee showed Thursday. The manufacturing confidence index rose to 101 in April from 99 in March. It was expected to rise to 100. This was the highest score since August 2011.
U.K. retail sales declined for the first time in six months in March on petrol sales, casting doubt over economic growth gaining strength at the start of the year. Retail sales including auto fuel unexpectedly dropped 0.5 percent on a monthly basis in March, reversing a 0.6 percent rise in February, data from the Office for National Statistics showed Thursday.
This was the first fall in six months and the biggest since January 2014. Economists had forecast a 0.4 percent rise for March.
Another report from the ONS showed that public sector net borrowing excluding interventions decreased by GBP 0.4 billion to GBP 7.4 billion in March. The expected level was GBP 7 billion.
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