Gold Soars To End Near $1,170 On Weak Dollar, Soft U.S. Jobs Data

(RTTNews) - Gold futures snapped a seven-day loss to end sharply higher on Friday, with the dollar trending lower and on bargain hunting, after some soft jobs data from the U.S. showed the economy to have created fewer jobs in October than expected, despite a decline in unemployment rate.

A report from the Labor Department on Friday showed weaker than expected U.S. job growth in October, although unemployment rate dropped to a new six-year low. The non-farm payroll employment rose by 214,000 jobs in October. Economists expected payrolls to expand by 235,000 with unemployment rate at 5.9 percent.

Investors continued to mull over the soft jobs report, even as markets were rife with speculations as to when the Federal Reserve will hike interest rates.

Gold for December delivery, the most actively traded contract, surged $27.20 or 2.4 percent to settle at $1,169.80 an ounce on the Comex division of the New York Mercantile Exchange on Friday.

Gold for December delivery scaled an intraday high of $1,173.30 and a low of $1,130.40 an ounce.

On Thursday, gold futures ended lower for a seventh straight session, on growing speculation about U.S. interest rate hikes on the back of some upbeat economic data, including a report showing a more than expected drop in initial jobless claims.

Gold was also weighed down by a stronger dollar on Thursday after European Central Bank President Mario Draghi said the ECB policymakers might use outright quantitative easing if deemed necessary. The ECB Chief offered a downbeat assessment of the eurozone economy, with risks to the outlook skewed to the downside. He also highlighted geopolitical risks that could dampen confidence.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged lower to 732.83 tons on Friday from its previous close of 735.82 tons on Thursday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 87.66 on Friday, down from its previous close of 88.07 late Friday in North American trade. The dollar scaled a high of 88.19 intraday and a low of 87.65.

The euro trended higher against the dollar at $1.2439 on Friday, as compared to its previous close of $1.2375 late Thursday in North American trade. The euro scaled a high of $1.2441 intraday and a low of $1.2360.

In economic news from the U.S., a report from the Labor Department on Friday showed weaker than expected U.S. job growth in October, with unemployment rate still dropping to a new six-year low. The non-farm payroll employment rose by 214,000 jobs in October compared to economist estimates for an increase of about 235,000 jobs.

Meanwhile, revised data showed employment climbed by 256,000 jobs in September and by 203,000 jobs in August, reflecting a net upward revision of 31,000 jobs.

From the eurozone, industrial production in both Germany and France rebounded in September, although the pace of recovery continued to remain weak.

Industrial production in Germany expanded 1.4 percent in September from August, when it fell by 3.1 percent, Destatis reported Friday. Economists had forecast a 2 percent rise for September.

France's overall industrial production remained flat month-over-month in September, in contrast to economists' expectations for a 0.2 percent drop and a 0.2 percent fall posted in August.

A leading index for Japan increased at a faster rate in September, results of a survey by the Conference Board showed Friday. The Conference Board's leading economic index, a measure of future economic conditions, increased 0.3 percent month-over-month in September, faster than the 0.1 percent rise in August. In July, the index had decreased 0.9 percent.