Gold Ends Below $1,200 As Dollar Strengthens

(RTTNews) - Gold futures ended lower for a third straight session on Thursday, as the dollar trended higher against a basket of major currencies and investors opted for the riskier equity assets after the U.S. Federal Reserve remained divided over the timing of an interest rate hike, evident from the minutes of its March policy meet.

Investors believe the disappointing jobs report from the U.S. Labor Department last Friday, along with a string of other soft economic data in recent weeks could prompt the Fed to delay its interest rate hike, possibly until the fall.

The minutes from the most recent Fed meeting on Wednesday showed Fed officials were divided about when to begin raising interest rates, with some calling for a rate hike in June while others have suggested waiting until next year.

Meanwhile, U.S. economic data came in better than anticipated Thursday following last Friday's disappointing jobs data. A report from the Labor Department showed a rebound in first-time claims for U.S. unemployment benefits in the week ended April 4.

A Commerce Department report on Thursday showed U.S. wholesale inventories to have risen slightly more than expected in February, with wholesale sales continuing to decrease.

Gold for June delivery, the most actively traded contract, dropped $9.50 or 0.8 percent to settle at $1,193.60 an ounce, on the Comex division of the New York Mercantile Exchange on Thursday.

On Wednesday, gold futures ended lower at $1,203.10 an ounce, down $7.50 or 0.6 percent, ahead U.S. Federal Reserve's minutes from its March policy meet, with investors anticipating cues on the timing of an interest rate hike.

Gold for June delivery scaled an intraday high of $1,203.30 and a low of $1,192.40 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 733.06 tons on Thursday, from its previous close of 735.45 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 98.97 on Thursday, up from its previous close of 98.05 on Wednesday in late North American trade. The dollar scaled a high of 99.04 intraday and a low of 98.04.

The euro trended lower against the dollar at $1.0663 on Thursday, as compared to its previous close of $1.0781 in North American trade late Wednesday. The euro scaled a high of $1.0790 intraday and a low of $1.0653.

On the economic front, a report from Labor Department on Thursday showed a rebound in first-time claims for U.S. unemployment benefits in the week ended April 4. The report said initial jobless claims climbed to 281,000, an increase of 14,000 from the previous week's revised level of 267,000. Economists expected jobless claims to rise to 285,000 from the 268,000 originally reported for the previous week.

Meanwhile, a Commerce Department report on Thursday showed U.S. wholesale inventories rose slightly more than expected in February, although wholesale sales continued to decrease.

The report showed wholesale inventories to have risen by 0.3 percent in February after climbing by an upwardly revised 0.4 percent in January. Economists expected wholesale inventories to edge up 0.2 percent compared to the 0.3 percent increase originally reported for the previous month.

Germany's exports and industrial production recovered at a faster-than-expected pace in February, boosting hopes of strong recovery in the growth engine of Eurozone during the first quarter, despite the weakness in new orders.

Driven by capital goods output, industrial production rose a seasonally and working-day adjusted 0.2 percent in February from the prior month, the Economy Ministry reported Thursday. It was faster than economists' expectations for a 0.1 percent rise.

A report from Destatis showed that exports grew 1.5 percent in February from January, when it declined 2.1 percent. Economists had forecast a growth of 1 percent.

Similarly, imports advanced 1.8 percent, reversing January's 0.2 percent fall. The monthly growth was faster than a 1.2 percent rise forecast by economists.

U.K. trade deficit in goods widened more-than-expected in February to its highest level in seven months, data from the Office for National Statistics showed Thursday. The visible trade deficit increased to GBP 10.340 billion from GBP 9.174 billion in January. Economists had forecast a shortfall of GBP 9 billion.

U.K. house prices increased more than expected in March after falling a month ago, survey data from Lloyds Banking Group's Halifax division showed Thursday. House prices rose 0.4 percent month-on-month in March, offsetting a 0.4 percent fall in February. Economists had forecast a marginal 0.1 percent growth.