Gold futures snapped a two-day loss to end higher on Friday, tracking rising equity markets, with some better-than-expected jobs data from the U.S. and unemployment rate dropping to a 7-year low. The data is seen as solid but not strong enough to put a June interest rate hike by the Federal Reserve back on the table. For the week, gold gained about 1.2 percent. A Labor Department report on Friday showed unemployment rate in the U.S. dropped to its lowest level in almost seven years, with employment in the U.S. increasing roughly in line with economist estimates in April. The unemployment rate at 5.4 percent was at its lowest since hitting a matching rate in May 2008. Non-farm payroll employment increased by 223,000 jobs in April compared to economist estimates for an increase of about 220,000 jobs. It is now expected the strong report will push the Federal Reserve to raise interest rates in either July or September. Gold for June delivery, the most actively traded contract, gained $6.70 or 0.6 percent to settle at $1,188.90 an ounce.
The dollar pared earlier gains against a basket of currencies after the data, though U.S. stocks opened higher on the evidence of an uptick in the economy. Gold prices have been stuck in a narrow range of around $50 an ounce since mid-March, as uncertainty over U.S. monetary policy pushed buyers to the sidelines. A failure to sustain a push above $1,200 an ounce last week is also weighing, Reflecting investor anxiety, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Shares (ARCA:GLD), fell 2.7 tonnes to 739.07 tonnes on Thursday.
