Gold Ends Higher Ahead Of Jobs Data

(RTTNews) - Gold futures rallied to end higher for a second straight session Thursday, with investors anxiously awaiting the crucial jobs data for January due tomorrow. Nonetheless, the gains were marginal after some upbeat economic data from the U.S. dulled the appeal for the precious metal, with the European Central Bank and the Bank of England maintaining the status quo on interest rates and quantitative easing.

The European Central Bank on Thursday left its main lending rate unchanged at 0.25%, in line with expectations. The ECB indicated continuation of its low interest rates, terming the economic recovery as uneven and fragile. As well, the Bank of England left its bond-buying program unchanged while holding on to its key lending rate at a record low of 0.5%.

In economic news from the U.S., initial jobless claims for U.S. unemployment benefits pulled back more than expected in the week ended February 1, after reporting a bigger-than-expected increase in the previous week. Meanwhile, labor productivity in the U.S. increased more than expected in the fourth quarter of 2013, with output showing another significant increase, a Labor Department report showed Thursday.

Gold for April delivery, the most actively traded contract, edged up $0.30 to close at $1,257.20 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for April delivery scaled an intraday high of $1,267.50 and a low of $1,252.50 an ounce.

Yesterday, gold ended modestly higher despite a strong dollar, as investors sought the safe haven appeal of the precious metal while tracking declining global equity markets.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged from its previous close of 797.05 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.85 on Thursday, down from its previous close of 81.04 late Wednesday in North American trade. The dollar scaled a high of 81.23 intraday and a low of 80.73.

The euro traded higher against the dollar at $1.3593 on Thursday, as compared to its previous close of $1.3533 late Wednesday in North America. The euro scaled a high of $1.3620 intraday and a low of $1.3484.

In economic news, initial jobless claims for U.S. unemployment benefits dropped to 331,000, a decrease of 20,000 from the previous week's revised figure of 351,000. Economists expected jobless claims to drop to 337,000 from the 348,000 originally reported for the previous week.

Meanwhile, labor productivity in the U.S. rose 3.2 percent in the fourth quarter following a revised 3.6 percent increase in the third quarter. Economists expected a rise of about 2.6 percent. The increase in productivity, a measure of output per hour, came as output surged up by another 4.9 percent in the fourth quarter after jumping by 5.4 percent in the third quarter.

U.S. trade deficit widened more than expected in December, due partly to a notable pullback in the value of exports, a report from the Commerce Department showed Thursday. U.S. trade deficit widened to $38.7 billion in December from a revised $34.6 billion in November. Economists expected a deficit of $36.0 billion.

Exports dropped 1.8 percent to $191.3 billion in December after climbing 0.8 percent to a record high of $194.8 billion in November. Imports edged up 0.3 percent to $230.0 billion in December after sliding 1.3 percent to $229.4 billion in the previous month.

From the eurozone, European Central Bank Governing Council kept its main refinancing rate at a record low 0.25 percent for a third consecutive month. The marginal lending facility rate was maintained at 0.75 percent and the deposit facility rate at zero, where it has remained since July 2012.

ECB President Mario Draghi said the outlook for euro area inflation remains subdued due to a weaker economy and the bank is ready to consider all available instruments to tackle any money market volatility.

Draghi added "We continue to expect the key ECB interest rates to remain at present or lower levels for an extended period of time."

Elsewhere in Europe, the Bank of England decided to leave its loose monetary policy unchanged on Thursday, in line with the forward guidance announced last year. The nine-member Monetary Policy Committee retained the interest rate at a record low 0.50 percent and the quantitative easing at GBP 375 billion. This was in line with economists' expectations.