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Gold posts rare winning session, as poor employment data pushes down USD

CommoditiesJul 31, 2015 01:06PM ET
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Gold ended one of its worst months this century by gaining more than $5 an ounce in Fri's session -- Gold posted a rare winning session on Friday to end a mild, four-day losing skid, amid a broadly lower dollar pushed down by a wave of disappointing economic data.

The precious metal still closed July with one of its worst memories since the turn of the century, as downward pressure from a dramatic fall in Chinese stocks, mounting speculation of an interest rate hike from the Federal Reserve and the potential resolution of the Greek Debt crisis and Iranian Nuclear Deal sent prices spiraling. A push to remain above $1,200, gold's level in mid-June, appears far in the rear view mirror.

On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a broad range between $1,079.30 and $1,102.70 before settling at $1,094.20, up 5.40 or 0.50% for the day. At one point this month, gold closed lower on every session during a 10-day stretch in mid-July -- experiencing its worst losing streak in nearly two decades.

In a somewhat shocking development, the U.S. Department of Labor said on Friday morning that its Employment Cost Index rose 0.2% for the second quarter, the lowest in the 33-year history of the report. On a year-over-year basis the index plunged 0.6% to 2.0%, posting one of its lowest readings ever. Within the report, wages and salaries fell considerably by 0.5% from the first quarter to 0.2%. The metric, which is closely watched by the Fed, will likely appease dovish viewpoints for a delayed interest rate hike.

Gold, which is not attached to dividends or interest rates, struggles to compete with high-yield bearing assets in raising rate environments.

Elsewhere, the University of Michigan said its Consumer Sentiment Index fell below its mid-month reading of 93.3 to end July at 93.1. The reading also fell below low end of consensus forecasts between 93.5 and 97.1. The subpar reading echoed a similarly soft report from The Conference Board on consumer confidence earlier in the week.

The U.S. Dollar Index, which measures the strength of the greenback, versus a basket of six other major currencies, fell to an intraday low of 96.38 before paring some of the losses in afternoon trading. With several hours left in Friday's session, the Index had gained about 1.6% on the month.

Silver for September delivery rose 0.049 or 0.33% to 14.745 an ounce.

Copper for September deliver fell 0.014 or 0.60% to 2.363 a pound.

Gold posts rare winning session, as poor employment data pushes down USD

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