Gold Ends Lower On Soft U.S. Data

(RTTNews) - Gold futures snapped a two-day gain to end lower on Wednesday, after some soft economic data from the U.S. showed employment in the private sector increased less than expected.

The precious metal failed to find support even as soft economic data from the U.S., pressured the dollar to trend lower against a basket of some major currencies.

In another sign of sluggishness in the U.S. labor market, a report from payroll processor ADP on Wednesday showed private sector employment to have increased much less than expected in April.

Meanwhile, labor productivity in the U.S. showed another notable decrease in the first quarter of 2015, a report from the Labor Department showed Wednesday.

Investors now await the crucial U.S. jobs report later this week, which is expected to go a long way in determining the health of the economy. Markets also continued to focus on the Fed's interest rate hike plans, tracking Atlanta Fed President Dennis Lockhart's comments that he is not too concerned over a weak first quarter.

Gold for June delivery, the most actively traded contract, dropped $2.90 or 0.2 percent to settle at $1,190.30 an ounce, on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for June delivery scaled an intraday high of $1,196.90 and a low of $1,187.40 an ounce.

On Tuesday, gold futures gained $6.40 or 0.5 percent to settle at $1,193.20 an ounce, with investors seeking the safe haven of the precious metal after most global equity markets declined on some soft trade data from the U.S. and the dollar trending lower.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 741.75 tons on Wednesday, from its previous close of 739.06 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.20 on Wednesday, down from its previous close of 95.14 on Tuesday in late North American trade. The dollar scaled a high of 95.22 intraday and a low of 93.88.

The euro trended higher against the dollar at $1.1339 on Wednesday, as compared to its previous close of $1.1185 in North American trade late Tuesday. The euro scaled a high of $1.1368 intraday and a low of $1.1176.

On the economic front, a report from payroll processor ADP on Wednesday showed private sector employment increased much less than expected in April, in another sign of sluggishness in the U.S. labor market.

ADP said employment in the private sector increased by 169,000 jobs in April compared to a downwardly revised increase of 175,000 jobs in March. Economists had expected private sector employment to climb by about 200,000 jobs compared to the addition of 189,000 jobs originally reported for the previous month.

Labor productivity in the U.S. showed another notable decrease in the first quarter of 2015, a report from the Labor Department showed Wednesday. Labor productivity fell by 1.9 percent in the first quarter following a 2.1 percent decrease in the fourth quarter. The continued drop in productivity matched economist estimates.

Meanwhile, the Labor Department said unit labor costs surged up by 5.0 percent in the first quarter after jumping by 4.2 percent in the fourth quarter. Economists had expected costs to increase by 4.5 percent.

Elsewhere, the services sector in China expanded at an accelerated pace in April, the latest survey from HSBC showed on Wednesday, with a PMI score of 52.9. That's up from 52.3 in March, and it moves further above the boom-or-bust score of 50 that separates expansion from contraction.

Eurozone retail sales declined in March for the first time in six months as both food and non-food product turnover decreased from February. Retail sales volume dropped 0.8 percent month-on-month in March, reversing a 0.1 percent rise in February, Eurostat reported Wednesday. This was the first decline since September and was larger than an expected drop of 0.7 percent.

Eurozone private sector growth slowed slightly less than initially estimated in April, final data from Markit Economics showed Wednesday. The composite output index fell slightly to 53.9 in April from 54 in March. The flash score was 53.5. The rate of expansion in economic output held broadly steady at March's 11-month high.

Germany's private sector growth weakened more than initially estimated in April, data from Markit revealed Wednesday. The composite output index fell to 54.1 in April from an eight-month high of 55.4. It was also below the flash score of 54.2. The latest index reading still indicates solid output growth.

The French private sector growth eased further in April but it slowed less than previously estimated, final data from Markit showed Wednesday. The composite output index fell to 50.6 in April from 51.5 in March. The reading signals a marginal growth rate. The flash score was 50.2.

The British services sector grew the most in eight months in April, led by marked gains in new business, which prompted firms to continue with robust pace of job creation, survey results from Markit Economics revealed Wednesday. The seasonally adjusted Markit/CIPS UK Services Purchasing Managers' Index for the services sector rose to 59.5 from 58.9 in March. Economists had expected a score of 58.5.