Investing.com - Gold futures bounced off earlier lows to end Friday’s session mildly higher, as investors digested the release of November’s non-farm payrolls data while continuing to monitor negotiations among U.S. lawmakers to avoid the looming “fiscal cliff” crisis.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery rose 0.2% on Friday to settle the week at USD1,705.35 a troy ounce.
On the week, gold futures retreated 0.65%, the second consecutive weekly decline.
Gold prices were likely to find near-term support at USD1,685.75 a troy ounce, Friday’s low and the lowest since November 6 and resistance at USD1,718.15, the high from December 4.
Gold futures fell to the lowest levels of the session immediately after the U.S. Department of Labor said the economy added 146,000 jobs in November, beating forecasts for an increase of 93,000. The unemployment rate fell to 7.7%, an almost four year low from 7.9% in October.
Any improvement in the U.S. economy could scale back expectations for further easing from the Federal Reserve, boosting the U.S. dollar and weighing on dollar-denominated commodities.
But prices turned higher as investors digested less encouraging details of the jobs report. According to the data, the decline in the unemployment rate was attributed to more people dropping out of the labor force, while previous month’s gain of 171,000 was revised down to 138,000.
Also Friday, the Thomson Reuters/University of Michigan preliminary index of consumer sentiment fell to a seasonally adjusted 74.5 for December from 82.7 in November.
Analysts had expected the index to fall only slightly to 82.4.
Meanwhile, investors continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the three weeks left before the deadline.
There are fears that U.S. lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the U.S.’s AAA rating in August 2011 and tip the country back into a recession.
Elsewhere, in the euro zone, Germany’s Bundesbank cut its forecast for growth in 2013 to just 0.4% from 1.6% previously and warned that the financial crisis in the euro zone will have a larger impact on the bloc’s largest economy.
On Thursday, European Central Bank President Mario Draghi said policymakers had discussed a rate cut and slashed forecasts for economic growth and inflation at the central bank’s post-policy meeting press conference.
The ECB left rates unchanged at 0.75%, in a widely expected decision.
Some bargain buying also contributed to gains, as investors returned to the market to seek cheap valuations after prices tumbled below key support levels earlier in the week.
From a technical standpoint, the precious metal was expected to draw strong support at the USD1,665-level, while resistance was likely to be capped in the USD1,720-range.
In the week ahead, investors will be focusing on the outcome of the Federal Reserve’s policy meeting on Wednesday, amid expectations that policymakers will continue to pursue a policy of monetary easing in order to support the U.S. economic recovery.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
The Fed vowed in September to buy USD40 billion in mortgage securities each month until the economy improves in a third round of what is known as quantitative easing, or QE3.
Market participants will also be focusing on a two-day summit meeting of European Union leaders due to begin Thursday.
Elsewhere on the Comex, silver for March delivery eased up 0.1% on Friday to settle the week at USD33.12 a troy ounce. On the week, silver futures dropped 1.05%, the second consecutive weekly decline.
Meanwhile, copper for March delivery added 0.6% Friday to close the week at USD3.667 a pound. On Wednesday, New York-traded copper futures hit a six-week high of USD3.693 a pound.
Copper prices rose 0.65% on the week, the fourth consecutive weekly gain.
Copper futures have been well-supported in recent weeks amid optimism demand in top consumer China will increase in the near-term. The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Data released over the weekend showed that industrial production in China rose 10.1% in November, more than the expected 9.8% increase and following a 9.6% rise the previous month.
A separate report showed that consumer price inflation ticked up 0.1% last month to take the annualized rate of inflation to 2.0%. Analysts had expected consumer price inflation to rise 0.2% on the month and 2.1% on the year.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery rose 0.2% on Friday to settle the week at USD1,705.35 a troy ounce.
On the week, gold futures retreated 0.65%, the second consecutive weekly decline.
Gold prices were likely to find near-term support at USD1,685.75 a troy ounce, Friday’s low and the lowest since November 6 and resistance at USD1,718.15, the high from December 4.
Gold futures fell to the lowest levels of the session immediately after the U.S. Department of Labor said the economy added 146,000 jobs in November, beating forecasts for an increase of 93,000. The unemployment rate fell to 7.7%, an almost four year low from 7.9% in October.
Any improvement in the U.S. economy could scale back expectations for further easing from the Federal Reserve, boosting the U.S. dollar and weighing on dollar-denominated commodities.
But prices turned higher as investors digested less encouraging details of the jobs report. According to the data, the decline in the unemployment rate was attributed to more people dropping out of the labor force, while previous month’s gain of 171,000 was revised down to 138,000.
Also Friday, the Thomson Reuters/University of Michigan preliminary index of consumer sentiment fell to a seasonally adjusted 74.5 for December from 82.7 in November.
Analysts had expected the index to fall only slightly to 82.4.
Meanwhile, investors continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the three weeks left before the deadline.
There are fears that U.S. lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the U.S.’s AAA rating in August 2011 and tip the country back into a recession.
Elsewhere, in the euro zone, Germany’s Bundesbank cut its forecast for growth in 2013 to just 0.4% from 1.6% previously and warned that the financial crisis in the euro zone will have a larger impact on the bloc’s largest economy.
On Thursday, European Central Bank President Mario Draghi said policymakers had discussed a rate cut and slashed forecasts for economic growth and inflation at the central bank’s post-policy meeting press conference.
The ECB left rates unchanged at 0.75%, in a widely expected decision.
Some bargain buying also contributed to gains, as investors returned to the market to seek cheap valuations after prices tumbled below key support levels earlier in the week.
From a technical standpoint, the precious metal was expected to draw strong support at the USD1,665-level, while resistance was likely to be capped in the USD1,720-range.
In the week ahead, investors will be focusing on the outcome of the Federal Reserve’s policy meeting on Wednesday, amid expectations that policymakers will continue to pursue a policy of monetary easing in order to support the U.S. economic recovery.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
The Fed vowed in September to buy USD40 billion in mortgage securities each month until the economy improves in a third round of what is known as quantitative easing, or QE3.
Market participants will also be focusing on a two-day summit meeting of European Union leaders due to begin Thursday.
Elsewhere on the Comex, silver for March delivery eased up 0.1% on Friday to settle the week at USD33.12 a troy ounce. On the week, silver futures dropped 1.05%, the second consecutive weekly decline.
Meanwhile, copper for March delivery added 0.6% Friday to close the week at USD3.667 a pound. On Wednesday, New York-traded copper futures hit a six-week high of USD3.693 a pound.
Copper prices rose 0.65% on the week, the fourth consecutive weekly gain.
Copper futures have been well-supported in recent weeks amid optimism demand in top consumer China will increase in the near-term. The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Data released over the weekend showed that industrial production in China rose 10.1% in November, more than the expected 9.8% increase and following a 9.6% rise the previous month.
A separate report showed that consumer price inflation ticked up 0.1% last month to take the annualized rate of inflation to 2.0%. Analysts had expected consumer price inflation to rise 0.2% on the month and 2.1% on the year.