Gold Ends At 3-Month Low On Hopes Over Greek Deal

(RTTNews) - Gold futures slipped for a third straight session to end at a more than three-month low on Thursday, on continued hopes for a deal in the Greek financial crisis. Nevertheless, the precious metal pared some of the losses after the dollar weakened on some disappointing economic data from the U.S. with a weaker than expected job growth in June and a more than anticipated increase in initial claims for U.S. unemployment benefits last week.

Investor hopes still continued to rest on a Greece deal with its international creditors, as it appears to be the only way for Greece to survive the crisis and get its economy back on rails.

For the week, gold future shed about 0.8 percent.

Although the Greek debt crisis pose a threat to the 17-nation currency bloc, there is widespread optimism that Athens will eventually come to an agreement with creditors, after its Sunday referendum. But again, chances are even that voters will likely reject terms of a bailout package arranged a few years back.

A closely watched Labor Department report on Thursday showed weaker than expected U.S. job growth in June, although the unemployment rate still dropped to a seven-year low. Meanwhile, a separate report from the Labor Department also showed an unexpected increase in initial jobless claims in the week ended June 27.

Gold for August delivery, the most actively traded contract, dropped $5.80 or 0.5 percent, to settle at $1,163.50 an ounce, on the Comex division of the New York Mercantile Exchange on Thursday, the lowest since March 18.

Gold for August delivery scaled an intraday high of $1,168.20 and a low of $1,155.80 an ounce.

On Wednesday, gold prices dropped $2.50 or 0.2 percent, to settle at $1,169.30 an ounce, on some upbeat private sector employment data for June even with a strong dollar. The decline was limited in anticipation of a last-minute deal to rescue Greece from the brink of fiscal disaster.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 711.44 tons on Thursday, from its previous close of 713.23 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.10 on Thursday, down from its previous close of 96.25 on Wednesday in late North American trade. The dollar scaled a high of 96.42 intraday and a low of 95.87.

The euro trended higher against the dollar at $1.1082 on Thursday, as compared to its previous close of $1.1054 in North American trade late Wednesday. The euro scaled a high of $1.1121 intraday and a low of $1.1037.

On the economic front, the U.S. Labor Department said non-farm payroll employment increased by 223,000 jobs in June, but below the addition of 230,000 jobs anticipated by economists.

Nonetheless, the unemployment rate still dropped to 5.3 percent in June from 5.5 percent in May. Economists expected the unemployment rate to dip to 5.4 percent. The bigger than expected decrease pulled the unemployment rate down to its lowest level since hitting 5.0 percent in April of 2008.

While the data was largely overshadowed by the release of the monthly jobs report, the Labor Department also released a report on Thursday showing an unexpected increase in initial jobless claims in the week ended June 27. Initial jobless claims rose to 281,000, an increase of 10,000 from the previous week's unrevised level of 271,000. Economists expected jobless claims to edge down to 270,000.

Eurozone producer prices continued to decline in May largely due to notable weakness in energy costs, data from Eurostat showed Thursday. Producer prices fell 2 percent year-on-year in May following a 2.1 percent drop in April. The annual fall matched economists' expectations.

The British construction sector expanded at a faster than expected rate in June, the fastest in four months, on higher output and new orders, survey figures from Markit Economics and Chartered Institute of Procurement & Supply showed Thursday. The seasonally adjusted Markit/CIPS UK Construction Purchasing Managers' Index rose to 58.1 in June from 55.9 in the previous month. Economists expected the index to rise to 56.5.

U.K. house prices dropped in June taking the annual growth to the lowest in two years, data from the Nationwide Building Society revealed Thursday. The annual increase in house prices moderated to a two-year low of 3.3 percent in June from 4.6 percent in May. Economists had forecast a 4.5 percent rise for June.