Gold Ends Lower After Jobless Claims Data

(RTTNews) - Gold futures ended lower for a second straight session Thursday, on some better-than-expected initial claims for unemployment benefits data in the U.S., amid speculation that an upbeat U.S. jobs report could put the Federal Reserve back on track to raise interest rates this summer.

Yesterday, Federal Reserve Chair Janet Yellen cautioned about the high valuation of stocks and bonds. The Fed Chief on Wednesday indicated bond yields could surge as the central bank looks to normalize policy.

A June rate hike may be unlikely regardless of the April jobs report, but analysts say July will be in play if the jobs data signals that winter economic weakness was transitory. The data is expected from the Labor Department Friday morning.

Gold prices pulled back after a Labor Department report earlier today showed first-time claims for unemployment benefits in the U.S. to have come in better-than-expected last week, as compared to the the notable pullback in claims the week earlier.

Gold for June delivery, the most actively traded contract, dropped $8.10 or 0.7 percent to settle at $1,182.20 an ounce, on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for June delivery scaled an intraday high of $1,192.00 and a low of $1,177.90 an ounce.

On Wednesday, gold futures shed $2.90 or 0.2 percent to settle at $1,190.30 an ounce, after some soft economic data from the U.S. showed employment in the private sector to have increased less than expected.

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

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.72 on Thursday, up from its previous close of 94.16 on Wednesday in late North American trade. The dollar scaled a high of 94.83 intraday and a low of 93.89.

The euro trended lower against the dollar at $1.1267 on Thursday, as compared to its previous close of $1.1348 in North American trade late Wednesday. The euro scaled a high of $1.1393 intraday and a low of $1.1241.

On the economic front, a Labor Department report on Thursday showed a slight rebound in initial jobless claims in the week ended May 2, after reporting a notable pullback in first-time claims for U.S. unemployment benefits in the previous week.

The report said initial jobless claims edged up to 265,000, an increase of 3,000 from the previous week's unrevised level of 262,000. Economists had expected jobless claims to climb to 280,000. While jobless claims showed a modest increase, they remained close to the fifteen-year low set in the previous week.

German factory orders recovered in March after falling for two straight months, supporting hopes of a moderate economic growth in the first quarter. Factory orders grew 0.9 percent month-on-month in March, offsetting February's 0.9 percent fall, data from Destatis showed Thursday. But the growth rate was weaker than a 1.5 percent rise forecast by economists.

French industrial production dropped unexpectedly in March, figures from the statistical office Insee showed Thursday. Industrial production dropped 0.3 percent month-on-month in March, defying economists' expectations for a 0.1 percent slight increase. In February, production had risen a revised 0.5 percent.

France's merchandise trade deficit for March narrowed from a year ago, data from the French Customs showed Thursday. The trade deficit contracted to EUR 4.575 billion from EUR 4.698 billion in the same month last year. However, the deficit figure was much larger than February's shortfall of EUR 3.623 billion.