Gold Ends Near $1115 On Upbeat Private Jobs Data

(RTTNews) - Gold futures dropped for a fourth straight session to end at a more than two-week low on Wednesday, amid some upbeat economic data from the U.S. with private sector jobs rising more than expected in September, and the dollar trending higher against a basket of some major currencies.

Gold futures shed 1.5 percent for the month, and dropped 4.8 percent for the quarter.

The upbeat jobs data could be a catalyst for the Fed to move towards a hike in interest rates with focus now on Friday's employment data, despite some persistent global economic headwinds led by China. Markets will now monitor the jobs data on Friday for more clues from the Federal Reserve about when they intend to raise interest rates. The central bank kept rates near zero last week, but signaled they are prepared to tighten either next month or in December.

In some encouraging economic news, a report from payroll processor ADP on Wednesday showed stronger than expected private sector jobs growth in September, reflecting impressive growth at large businesses.

However, a report from MNI Indicators showed an unexpected contraction in Chicago-area business activity in September, with production growth collapsing and new orders falling sharply.

Gold for December delivery, the most actively traded contract, dropped $11.60 or 1.0 percent, to settle at $1,115.20 an ounce, on the Comex division of the New York Mercantile Exchange Wednesday.

Gold for December delivery scaled an intraday high of $1,127.70 and a low of $1,112.50 an ounce.

On Tuesday, gold prices for December delivery dropped $4.90 or 0.4 percent, to settle at $1,126.80 an ounce, amid speculations over a Fed rate hike this year, even as concerns over the slowdown in the Chinese economy strengthened.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 684.14 tons on Wednesday from its previous close.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.30 on Wednesday, up from its previous close of 95.89 in late North American trade on Tuesday. The dollar scaled a high of 96.41 intraday and a low of 95.85.

The euro trended lower against the dollar at 1.1169 on Wednesday, as compared to its previous close of 1.1249 in North American trade late Tuesday. The euro scaled a high of 1.1263 intraday and a low of 1.1158.

In economic news, a report from payroll processor ADP on Wednesday showed stronger than expected private sector job growth in September, reflecting strong job growth at large businesses. Private sector employment jumped by 200,000 jobs in September following a downwardly revised increase of 186,000 jobs in August. Economists expected an increase of about 190,000 jobs, which would have matched the job growth originally reported for the previous month.

A report from MNI Indicators on Wednesday showed an unexpected contraction in Chicago-area business activity in September, with production growth collapsing and new orders falling sharply. MNI Indicators said its Chicago business barometer tumbled to 48.7 in September from 54.4 in August, with a reading below 50 indicating a contraction. Economists expected the barometer to decrease to 53.6, which would have still indicated growth.

The euro area unemployment rate remained unchanged at an elevated level in August as businesses generated fewer jobs amid weak economic growth. The jobless rate held steady at double-digit 11 percent in August, data from Eurostat showed Wednesday. The figure was expected to remain at July's originally estimated rate of 10.9 percent.

Eurozone experienced deflation in September for the first time in six months as energy prices decreased further adding pressure on the European Central Bank to initiate more quantitative easing. Consumer prices unexpectedly fell by 0.1 percent year-on-year in September, offsetting a 0.1 percent rise in August, flash data from Eurostat showed Wednesday. Economists had forecast prices to remain flat.

German unemployment increased unexpectedly in September, reports said citing data from the Federal Labor Agency on Wednesday. The number of unemployed increased by 2,000 from August, confounding expectations for a decline of 5,000. At the same time, the jobless rate stood steady at 6.4 percent in September as expected by economists.

Germany's retail sales decreased unexpectedly in August after rising in the previous month, data from Destatis showed Wednesday. Retail sales, in real terms, fell a seasonally and calendar-adjusted 0.4 percent month-over-month in August, confounding economists' expectations for a 0.2 percent increase. In July, sales had risen 1.6 percent.

Germany's unemployment rate dropped marginally in August, figures from Destatis showed Wednesday. The jobless rate dropped to an adjusted 4.5 percent in August from 4.6 percent in the previous month. In the corresponding month last year, the rate was 5.0 percent.

French producer prices continued its downward trend in August largely due to a sharp decrease in refined petroleum product prices, the statistical office INSEE reported Wednesday. Producer prices declined 2.1 percent in August from last year after falling 1.6 percent in July.

France's consumer spending remained unchanged in August, after rising in the previous months, as smaller changes for most of the goods offset each other, statistical office INSEE said Wednesday. Consumer spending in volume remained steady after a 0.3 percent rise in July and 0.4 percent in June.

The U.K. economy grew as initially estimated in the second quarter, data from the Office for National Statistics showed Wednesday. Gross domestic product grew 0.7 percent from the first quarter, unrevised from the second estimate published on August 28. It was faster than the 0.4 percent expansion seen in the first quarter.

U.K. house prices grew at the fastest pace in four months during September, the Nationwide Building Society said Wednesday. House prices increased 3.8 percent year-on-year in September, the fastest since May, when it grew 4.6 percent. The annual growth matched expectations and faster than August's 3.2 percent increase.

Consumer confidence in the United Kingdom was down in September, the latest survey from GfK showed on Wednesday with an index score of +3. That was shy of expectations for +5 and down from +7 in August.