Gold Ends Higher On Mixed Data

(RTTNews) - Gold futures ended higher Thursday, after fluctuating for most of the day on some mixed macroeconomic data out of the U.S., with uncertain signs the Federal Reserve would begin tapering its quantitative easing program later in the year. Gold made gains as China's manufacturing activity expanded in August, raising hopes of increased demand for the precious metal from its second biggest consumer in the world.

While a Conference Board report showed continuing recovery in the economy with its index of leading U.S. economic indicators rising more than expected in July, initial jobless claims for U.S. unemployment benefits rose more than anticipated last week.

Activity in China's manufacturing sector bounced back from contraction territory in August as new orders recovered, a preliminary survey by Markit Economics and HSBC showed. The flash HSBC purchasing managers' index rose to 50.1 in August from a 11-month low of 47.7 in July. Economists expected the index to increase to 48.2.

Gold for December delivery, the most actively traded contract, gained $0.70 or 0.05 percent to close at $1,370.80 an ounce Thursday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery scaled an intraday high of $1,381.40 and a low of $1,354.50 an ounce.

Yesterday, gold settled almost flat as the tone of the minutes of the FOMC meeting, released Wednesday, did not meaningfully reduce the risk of tapering this year.

The Federal Reserve remains divided about when to taper its massive bond-buying plan, the minutes of their July meeting revealed Wednesday. A few members said the Fed should be patient before scaling back monetary stimulus, while some argued that "it might soon be time to slow somewhat." Several members "were somewhat less confident about a near-term pickup in economic growth than they had been in June."

Still, most expect the Fed will slow down the pace of its $85 billion-per-month asset purchase plan by the end of the year, as long as the economic recovery continues. The reluctance to taper was based on concerns of higher oil prices, slow growth in key U.S. export markets, and reduced government spending. Policy makers also fear any talk of premature tightening could rattle equity markets.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 913.52 tons from 914.12 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.45 on Thursday, up from 81.38 late Wednesday in North American trade. The dollar scaled a high of 81.72 intraday and a low of 81.38.

The euro traded higher against the dollar at $1.3359 on Thursday, as compared to $1.3356 late Wednesday in North America. The euro scaled a high of $1.3384 intraday and a low of $1.3300.

In economic news from the U.S., the Labor Department said initial jobless claims rose to 336,000, an increase of 13,000 from the previous week's revised figure of 323,000. Economists had expected jobless claims to climb to 329,000 from the 320,000 originally reported for the previous week.

Earlier in the day, a Conference Board report showed its index of leading economic indicators to have risen slightly more than expected in July. The leading economic index increased 0.6 percent in July after coming in unchanged in June. Economists expected the index to increase by about 0.5 percent.

From the eurozone, German private sector activity expanded at the fastest pace in seven months in August, preliminary results of a survey by Markit Economics revealed. The composite output index, an indicator that measures the combined activity of manufacturing and service sectors, rose to a seven-month high of 53.4 in August from 52.1 in July.

Eurozone private sector business activity expanded at the sharpest pace in more than two years in August, preliminary results of a survey by Markit Economics revealed. The headline composite output index, a gauge of business activity in both manufacturing and services, rose to a 26-month high of 51.7 in August from 50.5 in July. Economists had forecast the score to rise to 50.9.