Gold Ends Higher On Jobs Data; Sheds 0.7% For Week

Goldbar 041213 06Sep13

Gold futures snapped a two-day loss to end sharply higher Friday, after some disappointing U.S. jobs data eased concerns of any immediate tapering of the Federal Reserve's quantitative easing program. The Fed's monetary stimulus is bullish for gold and any talk of quantitative easing pushes prices higher. Gold prices also found support with the dollar trading lower against a basket of major currencies and the euro.

Nevertheless, gold futures shed 0.7 percent for the week.

Investors once again sought the safe haven of the precious metal, even as President Barack Obama continued to feverishly pursue a military option against Syria for using chemical weapons on its people at the concluding day of the G20 summit. President Obama's pleaded for an immediate action against Syria, notwithstanding the strong differences between the U.S. and Russia on the issue, with opposition from countries like China, Argentina, South Africa, and India, among others.

In some disappointing economic news Friday, a report from the U.S. Labor Department showed employment in the country rose less than expected in August, with job growth in the retail and healthcare sectors partly offsetting the loss of jobs in the information sector.

Gold for December delivery, the most actively traded contract, gained $13.50 or 1.0 percent to close at $1,386.50 an ounce Friday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery scaled an intraday high of $1,393.60 and a low of $1,358.80 an ounce.

Yesterday, gold extended losses for a second day, shedding over 1 percent as investors mulled possibilities of a military strike on Syria by the U.S. and its allies, amid concerns the Federal Reserve may begin tapering its quantitative easing program soon after a slew of encouraging macroeconomic data out of the U.S.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 919.23 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.22 on Friday, down from 82.63 late Thursday in North American trade. The dollar scaled a high of 82.67 intraday and a low of 82.10.

The euro traded higher against the dollar at $1.3163 on Friday, as compared to its previous close of $1.3120 late Thursday in North America. The euro scaled a high of $1.3189 intraday and a low of $1.3106.

In economic news from the U.S., the Labor Department said non-farm payroll employment increased by 169,000 jobs in August compared to economist estimates for an increase of about 175,000 jobs. The report also showed a notable downward revision to the pace of job growth in July, with the revised data showing an addition of 104,000 jobs compared to the previously reported increase of 162,000 jobs. Despite the weaker than expected job growth, the unemployment rate dipped to 7.3 percent in August from 7.4 percent in July. The unemployment rate had been expected to come in unchanged.

From the eurozone, Germany's foreign trade surplus decreased more than forecast by economists in July amid a fall in exports, data from the Federal Statistical Office revealed. The trade surplus fell to EUR16.1 billion in July from EUR 17 billion in June. Economists had forecast a surplus of EUR 16.5 billion. In calendar and seasonally adjusted terms, the surplus was EUR 14.5 billion.

Meanwhile, Germany's industrial production decreased in July at a notably faster rate than economists had forecast, latest data showed. Industrial production fell a seasonally and calendar-adjusted 1.7 percent in July from the previous month, marking a deterioration from June's 2 percent increase, preliminary data released by the Federal Ministry of Economics and Technology showed. Economists had forecast production to record a 0.5 percent contraction in July

Elsewhere, British industrial production decreased in July, the latest figures from the Office for National Statistics revealed. Production declined 1.6 percent year-on-year in July, reversing a 1.4 percent increase in June. This compares with forecast for a 1.7 percent fall.

Britons' inflation expectations have eased from May and the proportion of respondents expecting an interest rate hike in the next 12 months was the lowest since 2008, results of a key survey from the Bank of England revealed.

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