Gold Ends Lower Ahead Of Jobs Data, Weak Dollar

(RTTNews) - Gold futures rebounded to end higher on Thursday, following a sell-off in major global equity markets ahead of the crucial weekly employment data and supported by the dollar trending lower against a basket of some major currencies.

A positive jobs data may cement the Fed's decision to tighten monetary policy. The U.S. jobless claims report for the week ended August 1 is scheduled for release tomorrow.

Investors are playing it cautious ahead of the monthly jobs report Friday, which could have a significant impact on the outlook for interest rates. A strong report would likely add to speculation that the Federal Reserve will raise rates in September, while a weak report could provide ammunition for more dovish central bankers to argue that the rate hike should be delayed.

Gold's appeal as a hedge against inflation has diminished and will only lessen if the Fed decides to hike rates in September.

First-time claims for U.S. unemployment benefits saw some further upside in the week ended August 1, following the rebound seen in the previous week. However, the increase was less than what analysts expected.

Gold for December delivery, the most actively traded contract, gained $4.50 or 0.4 percent, to settle at $1,090.10 an ounce, on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for December delivery scaled an intraday high of $1,093.30 and a low of $1,082.70 an ounce.

On Wednesday, gold prices for December delivery shed $5.10 or 0.5 percent, to settle at $1,085.60 an ounce, with investors anticipating a rate hike soon.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped to 667.93 tons on Thursday from its previous close of 670.62 tons on Wednesday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.87 on Thursday, down from its previous close of 97.89 in late North American trade on Wednesday. The dollar scaled a high of 98.16 intraday and a low of 97.63.

The euro trended higher against the dollar at $1.0916 on Thursday, as compared to its previous close of $1.0917 in North American trade late Wednesday. The euro scaled a high of $1.0945 intraday and a low of $1.0875.

On the economic front, first-time claims for U.S. unemployment benefits saw some further upside in the week ended August 1, following the rebound seen in the previous week, a Labor Department report showed Thursday. Initial jobless claims edged up to 270,000, an increase of 3,000 from the previous week's unrevised level of 267,000. Economists expected jobless claims to rise to 273,000. With the modest increase, jobless claims climbed further off the more than forty-year low of 255,000 set in the week ended July 18.

German manufacturing new orders surged in June, driven by robust demand from abroad, thanks to a weaker euro, dispelling concerns of a slowdown in the largest euro area economy.

Factory orders in Germany rose a seasonally-and-calendar adjusted 2 percent from May, when they declined 0.3 percent, the Federal Statistical Office said Thursday. May's drop was downwardly revised from the 0.2 percent fall estimated initially. Economists expected a mere 0.3 percent increase for the month. In April, orders grew 2.2 percent.

Germany's construction sector expanded at the weakest pace in six months in July, as output growth eased and new orders fell, survey figures from Markit Economics showed Thursday. The seasonally adjusted Purchasing Managers' Index, or PMI, dropped marginally to 50.6 in July from 50.7 in the previous month.

U.K. industrial production declined unexpectedly on a slump in oil and gas extraction in June, while manufacturing output recovered from the prior month.

Confounding expectations for a 0.1 percent increase, industrial production dropped 0.4 percent in June from May, when it rose a revised 0.3 percent, data from the Office for National Statistics revealed Thursday. This was the first fall in five months.

U.K. house prices dropped unexpectedly in July from June, data from Lloyds Banking Group's Halifax division revealed Thursday. House prices decreased 0.6 percent from June, which was the first fall in five months and confounding expectations for a 0.4 percent rise. Prices had increased 1.6 percent in June.