Gold Ends A Shade Lower Ahead Of Jobs Data

(RTTNews) - Gold futures ended a tad lower on Wednesday, ahead of the monthly U.S. jobs data and the European Central Bank meet on rates with the dollar trending higher. Nonetheless, the precious metal slipped after some positive economic data from the U.S. and China with the service sector activity index coming in better than expected, even as private sector jobs in the U.S. grew less than anticipated in May.

Demand for the safe-haven precious metal has been waning recently following some upbeat global macroeconomic data. Fairly strong equity markets also appear to be prompting investors to look for riskier assets.

The Institute for Supply Management's U.S. service sector survey showed the index of activity rose more than anticipated in May, with most respondents indicating a steady incremental growth. Meanwhile, China's non-manufacturing sector expanded at its fastest for the year in May, due mainly to robust new orders and improvement in the employment situation.

Gold for August delivery, the most actively traded contract, slipped $0.20 to close at $1,244.30 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for June delivery scaled an intraday high of $1,249.50 and a low of $1,242.80 an ounce.

On Tuesday, gold futures snapped a six-day losing streak to end marginally higher on some mixed macroeconomic data globally.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved up to 787.08 tons on Wednesday, from its previous close of 785.28 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.65 on Wednesday, up from its previous close of 80.54 late Tuesday in North American trade. The dollar scaled a high of 80.68 intraday and a low of 80.48.

The euro traded lower against the dollar at $1.3604 on Wednesday, as compared to its previous close of $1.3627 late Tuesday in North American trade. The euro scaled a high of $1.3640 intraday and a low of $1.3600.

In economic news, a report from payroll processor ADP on Wednesday showed the pace of job growth slowed by more than expected in May, after having reported a strong post-winter rebound in U.S. private sector employment in April. Private sector employment rose by 179,000 jobs in May following a downwardly revised increase of 215,000 jobs in April. Economists expected an increase of about 210,000 jobs compared to the addition of 220,000 jobs originally reported for the previous month.

The Institute for Supply Management's non-manufacturing index for the U.S. climbed to 56.3 in May from 55.2 in April, with a reading above 50 indicating growth in the service sector. Economists expected the index to show a modest increase to a reading of 55.5. This is the highest level of the the non-manufacturing index since reaching 57.9 in August 2013.

Labor productivity in the U.S. fell much more than previously estimated in the first quarter, with rough winter weather negatively impacting output, a report from the Labor Department showed Wednesday. Productivity tumbled by a revised 3.2 percent in the first quarter compared to the previously reported 1.7 percent drop. Economists expected productivity to fall by a revised 2.9 percent.

A Commerce Department report on Wednesday showed the U.S. trade deficit to have widened much more than expected in April, reflecting a drop in the value of exports and an increase in the value of imports. U.S. trade deficit widened to $47.2 billion in April from a revised $44.2 billion in March. Economists expected the deficit to edge up to $41.0 billion from the $40.4 billion originally reported for the previous month. This is the biggest U.S. trade deficit since the $47.8 billion deficit recorded in April 2012.

A report from Eurostat showed gross domestic product in the 18-nation currency bloc eurozone grew 0.2 percent sequentially, slower than the revised 0.3 percent expansion posted in the fourth quarter of 2013. Nonetheless, the slowdown in first quarter growth and signals of weaker recovery in the quarter-ahead, amid falling producer prices, boosted hopes of policy action from the European Central Bank as early as tomorrow.

The non-manufacturing Purchasing Managers' Index for China climbed to 55.5 in May from 54.8 in April, a report from the National Bureau of Statistics and the China Federation of Logistics and Purchasing showed Wednesday.