Precious metals end lower at Comex

U.S. dollar edges higher as ECB keeps rates unchanged

Bullion prices ended lower on Thursday, 03 April 2014 at Comex. Gold prices ended the U.S. day session moderately lower giving back more than half of what they gained a day earlier as the U.S. dollar edged higher in the wake of the European Central Bank's decision to leave interest rates unchanged. Traders also positioned themselves ahead of highly anticipated U.S. jobs data due Friday.

Gold for June delivery fell $6.20, or 0.5%, to $1,284.60 an ounce on the Comex division of the New York Mercantile Exchange. May silver dropped 24.5 cents, or 1.2%, to $19.805 an ounce.

The European Central Bank held its monthly monetary policy meeting on Thursday. The ECB made no major policy changes, which was the outcome expected by most. However, at this press conference ECB president Mario Draghi sounded very dovish on monetary policy. His remarks helped to pressure the Euro currency, which in turn supported the U.S. dollar index.

In other overnight news, the Markit data firm reported Thursday the EU's composite purchasing managers index fell to 53.1 in March from 53.3 in February. A reading above 50.0 suggests expansion. However, the survey said businesses reduced their prices for the 24th month in a row.

The Chinese government on Thursday announced a $24 billion stimulus plan in the form of railway improvements. Also, the HSBC China purchasing managers' index rose to 51.9 in March from 51.0 in February. Asian equity markets were supported on the China stimulus and PMI news.

U.S. economic data released Thursday included the weekly jobless claims report, the Challenger job cuts report, the international trade report, the global services PMI, and the U.S. services PMI. This data was a mixed bag but slightly favored the weak side of expectations, and that did lift the gold market up from its daily low.

The weekly initial claims level increased to 326,000 from a revised 310,000 (from 311,000). The consensus expected the initial claims level to increase to 320,000. The U.S. trade deficit increased to $42.30 billion in February from a slightly upwardly revised $39.30 billion (from $39.10 billion) in January. That was the largest deficit since reaching $43.40 billion in September 2013. The goods deficit rose to $61.70 billion in February from $59.50 in January, an increase of $2.20 billion. The services surplus fell $800 million to $19.40 billion in February from $20.20 billion.

separately, the ISM Non-Manufacturing Index increased to 53.1 in March from 51.6 in February while the consensus expected an increase to 53.5. The increase in the headline index was mostly the result of a recovery in employment. The Employment Index, which contracted in February, increased to 53.6 in March from 47.5.

Arguably the most important economic data point of the week and of the month is Friday's March U.S. employment report from the Labor Department. The key non-farm payrolls number is expected to be up 200,000.

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