Gold Ends Slightly Higher As Dollar Weakens

(RTTNews) - Gold futures snapped a two-day loss to end slightly higher on Thursday, as the dollar trended lower against a basket of major currencies, after U.S. retail sales in February dropped more than expected.

Nevertheless, gold was unable to take back much of its recent losses amid another round of upbeat U.S. jobs data that came in better than expected, in the latest sign the jobs market is heating up.

Retail sales in the U.S. unexpectedly fell for a third straight month in February, attributed to a substantial drop in auto sales. Any upbeat retail sales data is normally associated with a strengthening economy, while weaker sales point to weak economic growth.

Gold for April delivery, the most actively traded contract, inched up $1.30 or 0.1 percent to settle at $1,151.90 an ounce, on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for April delivery scaled an intraday high of $1,165.70 and a low of $1,147.50 an ounce.

On Wednesday, gold ended at $1,150.60 an ounce, down $9.50 or 0.8 percent, after the dollar continued to climb toward parity with the euro with persistent worries over Europe and in expectation of the Fed Reserve hiking interest rates sooner than later.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 753.04 tons on Thursday from its previous close of 756.32 tons.

A stronger dollar has weighed on commodities of late. The buck jumped to a 12-year high of $1.065 versus the euro, but has taken a breather this morning.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 99.39 on Thursday, down from its previous close of 99.68 on Wednesday in late North American trade. The dollar scaled a high of 100.06 intraday and a low of 98.65. The dollar scaled its highest in the last one year intraday.

The euro trended higher against the dollar at $1.0612 on Thursday, as compared to its previous close of $1.0548 on Wednesday in late North American trade. The euro scaled a high of $1.0684 intraday and a low of $1.0498, the lowest in the last one year.

In economic news, first-time claims for U.S. unemployment benefits pulled back more than anticipated in the week ended March 7, after reporting a notable increase over the two previous weeks, a Labor Department report showed Thursday. Initial jobless claims dropped to 289,000, a decrease of 36,000 from the previous week's revised level of 325,000. Economists expected jobless claims to pull back to 309,000 from the 320,000 originally reported for the previous week.

Retail sales in the U.S. unexpectedly fell for a third straight month in February, a report from the Commerce Department showed Thursday, with the decrease partly reflecting a substantial drop in auto sales. Retail sales slid 0.6 percent in February following a 0.8 percent decrease in January. Economists expected sales to rise by 0.3 percent.

Import prices in the U.S. rebounded slightly more than anticipated in February, a Labor Department report said Thursday, although export prices showed a modest drop. Import prices rose 0.4 percent in February after plunging by a revised 3.1 percent in January. Economists expected prices to edge up by 0.2 percent compared to the 2.8 percent drop originally reported for the previous month.

Meanwhile, the Labor Department said export prices edged down 0.1 percent in February following a 1.9 percent decrease in January. The modest drop was in line with economists' estimates.

With a drop in manufacturing inventories offsetting an increase in wholesale inventories, a Commerce Department report on Thursday showed U.S. business inventories nearly flat in January. Business inventories came in nearly unchanged for the second consecutive month in January. Economists expected inventories to edge up by 0.1 percent.

Eurozone industrial output declined unexpectedly in January as the impetus from weaker euro and oil prices were insufficient to maintain the growth in production. Industrial production fell 0.1 percent in January from December, which was the first decline in five months, data from Eurostat revealed Thursday. Economists had forecast output to grow 0.2 percent after rising revised 0.3 percent in December.

Germany's consumer prices recovered as estimated earlier in February, final data from Destatis showed Thursday. The consumer price index grew 0.1 percent in February from last year, confirming the flash estimate. This was in contrast to the 0.4 percent decrease in the previous month.

French consumer prices declined for the second straight month in February, the statistical office Insee showed Thursday. Consumer prices dropped 0.3 percent on a yearly basis in February, marking the second consecutive fall. Economists had forecast prices to fall 0.4 percent as registered in January.

The U.K.'s visible trade deficit narrowed largely due to a fall in oil imports in January, data from the Office for National Statistics showed Thursday. The visible trade deficit narrowed to GBP 8.4 billion in January from GBP 9.9 billion in December. The shortfall was forecast to decline to GBP 9.6 billion.

Ireland's economy grew for a second consecutive year in 2014 and at the fastest pace since 2007, marking the strongest growth in the EU, led by robust investments, exports and domestic demand. The Irish gross domestic product rose 4.8 percent in 2014 after a 0.8 percent gain in the previous year. In 2012, the economy contracted 0.3 percent. The country exited an EU/IMF bailout program in late 2013.