Gold futures ended with a daily gain Friday, reversing an early loss after a weaker-than-expected rise in U.S. labour costs, but still ended an ugly July with the biggest monthly decline in more than two years.
Gold for August delivery on Comex ended the day up $6.50 at $1,094.90 U.S. an ounce. December gold which is now the most actively traded contract, rose $6.40, or 0.6%, to finish at $1,095.10 U.S. an ounce after earlier trading as low as $1,079.20 U.S.
For the month, gold logged a 6.5% July loss on a most-active basis, the biggest drop since a slide of more than 12% in June 2013.
The yellow metal saw relief Friday from selling pressure after the U.S. Labor Department said its employment cost index rose a record low 0.2% in the second quarter, well below the 0.7% rise penciled in by economists. Weaker labour costs could give the Federal Reserve a reason to hold off on delivering a rate hike that investors have largely penciled in for later this year.
Expectations for a Fed rate hike—and the resulting strength in the dollar—have been credited with driving gold and other commodities lower. Higher rates make commodities, which offer no yield, less attractive. A stronger dollar can weigh on commodities priced in the unit by making them more expensive to users of other currencies.
Some analysts, however, argue that concerns about global financial stability amid continued tensions over Greece and China’s stock-market rout might be a bigger factor, despite the fact gold is typically seen as a haven during times of turmoil.
In other metals trade, September silver rose 4.9 cents, or 0.3%, to $14.745 U.S. an ounce.
October platinum lost $$4.90 to end at $985 U.S. an ounce, while September palladium fell $9.70, or 1.6%, to $620.55 U.S. an ounce.
September copper lost two cents to end at $2.36 U.S. a pound
