Gold remains unchanged by upbeat U.S. data, unchanged Fed stimulus supports

Gold remained fairly unchanged in the late European and early American sessions despite a series of upbeat U.S. data as market sentiment continued to be overwhelmed by Feds decision to refrain from trimming its monetary easing program in September. Silver, platinum and palladium also retained gains.

On the Comex division of the New York Mercantile Exchange, gold futures for December settlement traded at $1 364.00 per ounce at 14:40 GMT, down 0.3% on the day. Prices ranged between days high and low of $1 375.10, the strongest level since September 10, while day’s low was at $1 358.70. The precious metal surged 4.7% on Wednesday, erasing prior weekly losses and extending its advance to 2.9%.

The U.S. Department of Labor reported on Thursday that the number of people who filed for initial jobless payments last week rose by 15 000 to a seasonally adjusted 309 000. However, claims data were thrown into disarray last week after computer systems in two states, California and Nevada, were undergoing an update and failed to process some of the filed claims. This led to a sharp decline in last weeks reading to 290 000 claims filed. A Department of Labor analyst said that the two states are still working through the backlog, which could take a week or two and may have led to a further inaccurate drop in this weeks reading.

If considered as exact, the data showed a consistent increase in hiring, which would make the Fed more comfortable in trimming its bond buying program at the next FOMC meeting in December. The four-week average, which irons out weekly volatility, stood at 314 750 claims and was 5% below Augusts reading.

Millan Mulraine, an economist at TD Securities in New York, said for Reuters: “This report paints a very encouraging picture on the job separation side of the labor market, which continues to see signs of sustained improvement.”

Meanwhile, data by the Commerce Department showed that the U.S. current account deficit in the second quarter fell to $98.89 billion, the lowest since 2009. Market analysts expected a decrease to $96.30 billion from the preceding quarters $104.90 billion deficit. The gap narrowed down to 2.4% of the Gross Domestic Product and reached the lowest ratio since 1998. The biggest part in the decrease a had surge in exports, which rose by 0.9% in the months from April to June.

A separate report by the National Association of Realtors said that existing home sales in the U.S. rose to a 6 1/2-year high of 5.48 million in August, indicating persistent recovery in the housing market. The reading was the strognest since February 2007 and defied market analysts projections for a drop to 5.25 million from Julys 5.39 million homes sold.

Meanwhile, data also showed that the Philadelphia FED Index, which tracks the manufacturing activity in the region, exceeded economists projections for a surge to 10.0 from Julys 9.3 and rose to 22.3. At the same time, the U.S. Leading Indicators index also surpassed expectations for a 0.6% advance and rose by 0.7% in August after adding 0.6% in the preceding month.

The upbeat data however couldnt pressure down the precious metal as Feds decision not to trim its monetary easing program and the lack of a certain date announced stoked safe haven demand. Gold surged more than 4% after yesterdays settlement before the end of FOMCs meeting. According to a statement after the conclusion of the summit, policy makers “decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.” Chairman Ben Bernanke and his colleagues feared that the rising borrowing costs were showing signs of slowing the four-year expansion of the U.S. economy. Data showed on Tuesday that consumer inflation was struggling to pick up and remained well below Fed’s target at 2%. Bernanke once again said that there is “no fixed calendar schedule”.