A rally in U.S. equities kept a cap on any gains
Bullion prices ended moderately higher on Thursday, 06 February 2014. Gold futures managed to score a modest gain by the close on Thursday, after spending the bulk of the session trading a bit lower, with investors anxiously awaiting January U.S. jobs data, scheduled to be released early Friday. A weaker U.S. dollar index was a bullish daily input for the gold market on Thursday. However, a rally in U.S. equities kept a cap on any gains as the market digested comments from the European Central Bank's Mario Draghi and a fall in U.S. jobless claims.
Gold for April delivery tacked on 30 cents to settle at $1,257.20 an ounce on the Comex division of the New York Mercantile Exchange.
March silver added 12 cents, or 0.6%, to $19.93 an ounce, extending its 2% gain from a day earlier.
A recent spate of disappointing U.S. economic data has put even more importance on Friday morning's monthly U.S. jobs report for January. A weaker-than-expected jobs report on Friday would call into question how much more the Fed would be able reduce its monthly bond-buying program, also called quantitative easing.
The important data point for Thursday was the monthly monetary policy meeting of the European Central Bank, including a press conference by ECB president Mario Draghi. The ECB left its key interest rates unchanged at the meeting.
Today's economic data at Wall Street featured three reports. The initial claims level settled back into the 330,000 range this week as the initial claims level fell to 331,000 from an upwardly revised 351,000 (from 348,000). The consensus expected the initial claims level to fall to 335,000.
Fourth quarter nonfarm labor productivity increased 3.2% while the consensus expected an increase of 2.4%. That was down from an upwardly revised 3.6% increase (from 3.0%) in the third quarter. Profit growth outperformed labor gains in the fourth quarter. Compensation per hour increased only 1.5%, down from a 1.6% increase in the third quarter. With compensation increasing at a slower rate than productivity, unit labor costs fell 1.6%. That was the third quarterly decline of 2013.
The U.S. trade deficit for December widened to $38.7 billion from an upwardly revised $34.6 billion (from $34.3 billion). The consensus expected the trade deficit to increase to $36.0 billion. The Bureau of Economic Analysis assumed the trade deficit in December increased to around $37.0 billion in the advance estimate for fourth quarter GDP. The slightly higher than expected deficit will likely contribute to lower GDP growth in the second estimate.
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