Gold Ends A Tad Higher After Disappointing U.S. Jobs Data

(RTTNews) - Gold futures ended a tad higher on Friday, with the dollar weakening against a basket of major currencies after data from the U.S. showed employment to have increased much less than expected in August. Investors were focused on the employment data for cues as to when the Federal Reserve would likely begin hiking interest rates from historic lows.

Investors also mulled over the European Central Bank's move to cut interest rates, with the central bank announcing a program to start the purchase of euro-denominated covered bonds and transparent asset-backed securities from October.

In some disappointing economic news from the U.S., employment in the country increased much less than expected in August, a report from the Labor Department showed Friday. Nevertheless, the unemployment rate edged down in August from the previous month, due largely to a decline in the size of the labor force.

Gold for December delivery, the most actively traded contract, dropped $0.8 to close at $1,267.30 an ounce on the Comex division of the New York Mercantile Exchange on Friday.

Gold for December delivery scaled an intraday high of $1,274.80 and a low of $1,258.00 an ounce.

On Thursday, gold futures ended slightly lower, largely withstanding a dramatic rally in the U.S. dollar after the European Central Bank announced measures aimed at sparking that region's economy.

On Thursday, the ECB surprisingly slashed its benchmark interest rate to a record low of 0.05 percent from 0.15 percent. The central bank also reduced its deposit facility rate to -0.2 percent, while the marginal lending rate was cut to 0.3 percent from 0.4 percent earlier. The ECB also announced that it will start purchasing euro-denominated covered bonds and transparent asset-backed securities from October.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down further to 785.72 tons on Friday, from its previous close of 790.51 tons on Thursday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 83.75 on Friday, down from its previous close of 83.85 late Thursday in North American trade. The dollar scaled a high of 83.94 intraday and a low of 83.56.

The euro trended higher against the dollar at $1.2957 on Friday, as compared to its previous close of $1.3944 late Thursday in North American trade. The euro scaled a high of $1.2987 intraday and a low of $1.2922.

In economic news from the U.S., employment in the U.S. for August rose much less than expected, the Labor Department said Friday. The non-farm payroll employment increased by 142,000 jobs in August compared to economists' estimates for an addition of about 225,000 jobs.

Despite the weaker than expected job growth, unemployment rate in the U.S. edged down to 6.1 percent in August from 6.2 percent in July, due largely largely to a decrease in the size of the labor force which fell by 64,000.

In economic news from the eurozone, a report from Eurostat showed eurozone GDP remained flat in the second quarter, expanding just 0.2 percent. Year on year, GDP grew 0.7 percent in the second quarter, after seeing a 1 percent expansion in the previous three months.

A report from Destatis showed German industrial production to have grown the most in July since early 2012, rising by a seasonally adjusted 1.9 percent compared to June. Economists had forecast production growth of 0.4 percent following the original 0.3 percent gain in June.

A leading indicator of economic activity in Japan continued to increase in July, though at a less than expected rate, preliminary figures from Cabinet Office showed Friday. The leading index rose to 106.5 in July from 105.9 in June, when it had risen for the first time in five months. Economists had expected the index to rise to 107.1.