Gold Ends Higher On Soft Jobs Data; Gains 0.7% For Week

(RTTNews) - Gold futures made gains for a second straight day to end at a four-week ended high Friday, after some disappointing non-farm payrolls jobs data out of the U.S. missed expectations by a huge margin with the dollar trending lower against some select currencies. The soft jobs data triggered speculations over the state of economic recovery in the country and pace at which the Federal Reserve would taper its quantitative easing program in the future.

For the week, gold futures gained about 0.7 percent.

A Labor Department report on Friday showed U.S. employment to have increased far lesser than expected in December, due partly to the inclement winter weather. Nonetheless, U.S. unemployment rate dropped to 6.7 percent in December from 7.0 percent in November, which is down at its lowest level since October 2008. The decline was largely due to a decrease in the size of the labor force as some unemployed people gave up looking for work.

Non-farm payroll employment edged up by 74,000 jobs in December compared to economists' estimates for an increase of about 200,000 jobs. The December growth reflects a substantial slowdown from the upwardly revised increase of 241,000 jobs in November. Economists expected employment to increase by about 200,000 jobs compared to the addition of 203,000 jobs originally reported for the previous month. Bad weather during the month likely contributed to the weaker than expected growth, as the Labor Department said 273,000 people were not able to work because of the weather, the most since 1977.

Meanwhile, Barclays Bank has forecast average 2014 gold price at $1,205 per ounce and said slower-than-expected U.S. Federal Reserve tapering, weaker equity markets and a softer dollar could help to revive gold in the short term.

Gold for February delivery, the most actively traded contract, gained $17.50 or 1.4 percent to close at $1,246.90 an ounce Friday on the Comex division of the New York Mercantile Exchange.

Gold for February delivery scaled an intraday high of $1,248.50 and a low of $1,226.60 an ounce.

Yesterday, gold snapped a three-day loss to settle higher, ahead of the monthly non-farm payrolls data with the dollar weakening against some select currencies. The gains were capped after some upbeat data showed first time unemployment benefit claims in the U.S. dropped more than expected. The encouraging jobless claims benefits data renewed speculations the Federal Reserve would continue tapering its quantitative easing program through the year.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 793.12 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.64 on Friday, down from its previous close of 80.94 late Thursday in North American trade. The dollar scaled a high of 81.14 intraday and a low of 80.53.

The euro traded higher against the dollar at $1.3667 on Friday, as compared to its previous close of $1.3608 late Thursday in North America. The euro scaled a high of $1.3687 intraday and a low of $1.3576.

In economic news from the U.S., the U.S. Labor Department said said non-farm payroll employment edged up by 74,000 jobs in December following an upwardly revised increase of 241,000 jobs in November. Economists had been expecting employment to increase by about 200,000 jobs compared to the addition of 203,000 jobs originally reported for the previous month. Despite the weaker than expected job growth, the unemployment rate dropped to 6.7 percent in December from 7.0 percent in November.

Meanwhile, wholesale inventories in the U.S. increased in line with economist estimates in November, a report from the Commerce Department showed Friday. Wholesale inventories rose 0.5 percent in November following a revised 1.3 percent increase in October. Inventories were up 3.3 percent compared to the same month a year ago.

China's trade surplus missed forecast as exports growth eased more than expected in December, while imports beat expectations signaling robust domestic demand, data from the General Administration of Customs showed Friday.

China's exports grew 4.3 percent year-on-year in December, slower than a 5 percent expansion forecast by economists. The pace of growth decelerated sharply from November's 12.7 percent increase. Meanwhile, import growth accelerated unexpectedly last month, taking the annual growth rate to 8.3 percent. This followed a 5.3 percent gain in November and exceeded forecasts for a 5 percent rise. The trade balance showed a surplus of $25.6 billion, down from $33.8 billion in November and $32.15 billion surplus forecast.

Elsewhere, the U.K.'s industrial production remained unchanged in November compared with the previous month, the latest figures from the Office for National Statistics showed. The weaker-than-expected outcome followed two successive months of improvement. Output increased by a revised 0.3 percent in October and 0.9 percent in September. Economists had forecast a 0.4 percent increase in November.