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Gold futures hold gains after U.S. jobless claims data

Published 08/08/2013, 08:58 AM
Updated 08/08/2013, 08:58 AM

Investing.com - Gold futures were higher on Thursday, holding on to gains after data showed that the number of people who filed for unemployment assistance in the U.S. rose less-than-expected last week.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,293.80 a troy ounce during U.S. morning hours, up 0.65%.

Comex gold futures hit a session high of USD1,296.50 a troy ounce earlier in the day.

The December contract settled up 0.2% at USD1,285.30 a troy ounce on Wednesday after falling to a three-week low of USD1,272.10 a troy ounce earlier in the session.

Gold futures were likely to find short-term support at USD1,272.10 a troy ounce, Wednesday’s low and resistance at USD1,319.85, the high from August 5.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits rose by 5,000 to a seasonally adjusted 333,000 last week.

Jobless claims for the preceding week were revised up to a gain of 328,000, from a previously reported 326,000.

Analysts had expected U.S. jobless claims to increase 8,000 to 336,000 last week.

Investors have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Federal Reserve to reduce its bond purchases.

Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months.

Cleveland Fed President Sandra Pianalto said Wednesday there has been “meaningful improvement” in the labor market and that tapering may be warranted if it continues to strengthen.

Her comments echoed similar remarks made by Chicago Fed President Charles Evans and Dallas Fed President Richard Fisher earlier in the week.

A broadly weaker U.S. dollar also supported gains, as dollar-priced commodities become cheaper to investors holding other currencies when the greenback weakens.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.15% to trade at 81.17, the lowest level since June 19.

The precious metal is on track to post a loss of 24% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

Elsewhere on the Comex, silver for September delivery rallied 2.3% to trade at USD19.96 a troy ounce, while copper for September delivery surged 3% to trade at USD3.269 a pound, the strongest level since June 10.

Market sentiment improved after official trade data released earlier showed that Chinese exports rose 5.1% from a year earlier in July, beating expectations for a 3% increase and following a 3.1% drop in June.

The data showed that imports surged 10.9%, blowing past forecasts for a 2.1% increase and following a 0.7% decline in June.

The country’s trade surplus narrowed to USD17.8 billion for the month from a surplus of USD27.1 billion in June.

The upbeat report eased concerns over a slowdown in the world’s second-largest economy and biggest consumer of the industrial metal.

Copper traders now looked ahead to a raft of Chinese economic data on Friday, including reports on inflation, industrial production and retail sales.

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