Gold Ends Higher On Soft Jobs Data

(RTTNews) - Gold futures ended sharply higher on Monday, as investors turned to the precious metal after some soft economic news from the U.S. with employment in the country rising much lesser than expected in March, fueling speculation of a delay in rate hike by the Federal Reserve. Gold also found additional support with the dollar trending lower against the euro.

In the latest in a recent string of disappointing economic data, the Labor Department's report on Friday showed employment in the U.S. rose less than expected in March.

The non-farm payroll employment rose by 126,000 jobs in March following a downwardly revised increase of 264,000 jobs in February. Economists expected employment to increase by about 245,000 jobs compared to the addition of 295,000 jobs originally reported for the previous month.

Meanwhile, the unemployment rate remained at a six-year low of 5.5 percent in March, unchanged from February and in line with economist estimates.

Analysts say the jobs growth is consistent with the softer data seen in recent months but suggested bad weather and the West Coast port disruption to have distorted the true picture for the economy.

As well, growth in U.S. services sector slowed in March for the first time this year, an industry survey released on Monday showed.

Gold for June delivery, the most actively traded contract, jumped $17.70 or 1.5 percent to settle at $1,218.60 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.

Gold for June delivery scaled an intraday high of $1,224.50 and a low of $1,212.60 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 737.24 tons on Monday, from its previous close.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.74 on Monday, up from its previous close of 96.59 on Thursday in late North American trade. The dollar scaled a high of 96.82 intraday and a low of 96.33.

The euro trended higher against the dollar at $1.0983 on Monday, as compared to its previous close of $1.0972 in North American trade late Thursday. The euro scaled a high of $1.1037 intraday and a low of $1.0966.

In economic news, growth in U.S. services sector slowed in March with a slowdown in production contributing to the decreased pace of growth. Nevertheless, March also saw a pick up in new orders, with prices and employment expanding as well. The Institute for Supply Management said its index of non-manufacturing activity for the U.S. came in at 56.5 for March, down from the level of 56.9 seen in the previous month.

The 56.5 reading for March represented the slowest growth for the non-manufacturing segment this year, tying the result seen in December.

Meanwhile, the new orders index climbed to 57.8 in the month, compared to a reading of 56.7 in the previous month. The employment index ticked up to 56.6 from 56.4. The prices index rose to 52.4 from 49.7 in the previous month, after a contraction in February.