Gold futures fall to session low after ADP data, jobless claims

Shutterstock photo - Gold futures were lower during U.S. morning trade on Thursday, falling to the lowest level of the session following the release of mostly upbeat U.S. employment data.

Futures came under additional pressure as the U.S. dollar advanced amid growing uncertainty over how the U.S. will tackle further budgetary battles and the USD16.4 trillion debt ceiling that it reaches in February.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,676.65 a troy ounce during U.S. morning trade, down 0.7% on the day.

Prices fell by as much as 0.8% earlier in the session to hit a daily low of USD1,675.45 a troy ounce. Gold futures hit USD1,695.35 a troy ounce on Wednesday, the strongest level since December 18.

Gold prices were likely to find support at USD1,654.15 a troy ounce, the low from December 28 and near-term resistance at USD1,704.35, the high from December 18.

Payroll processing firm ADP said earlier that non-farm private employment rose by a seasonally adjusted 215,000 in December, above expectations for an increase of 133,000.

The previous month's figure was revised up to a gain of 148,000 from a previously reported increase of 118,000.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending December 29 rose by 10,000 to a seasonally adjusted 372,000, compared to expectations for a decline of 7,000 to 355,000.

Jobless claims for the preceding week were revised up to 362,000 from a previously reported 350,000,

Market players were eyeing the release of the minutes of the Federal Reserve's most recent policy-setting meeting.

At that meeting, the Fed pledged to keep interest rates at near-zero levels so long as the unemployment rate is above 6.5% and provided inflation in the year or two ahead is below 2.5%.

Gold traders also looked ahead to Friday's highly-anticipated data on U.S. nonfarm payrolls, as investors attempt to gauge the strength of the country's economic recovery.

Any improvement in the U.S. economy could scale back expectations for further easing from the Federal Reserve.

Meanwhile, investors remained concerned over the longer term fiscal outlook in the U.S., with negotiations on raising the U.S. debt ceiling still to come in February.

Echoing the growing nervousness over the debt ceiling debate, a spokesman from the International Monetary Fund warned that "more remains to be done" to lower the U.S. debt load.

Meanwhile, rating agency Moody's said Wednesday that avoiding the fiscal cliff was only the first in a number of steps needed to ensure that the U.S. kept its coveted triple-A rating.

Standard & Poor's, which downgraded the U.S. to AA+ from AAA in August 2011, said the deal had done little to alter the country's negative credit outlook.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.45% to trade at 80.27, the strongest level since December 11.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

Elsewhere on the Comex, silver for March delivery dipped 0.45% to trade at USD30.86 a troy ounce, while copper for March delivery eased down 0.2% to trade at USD3.730 a pound. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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