US gold futures end down as dollar rises,oil falls

NEW YORK, March 9 - U.S. gold futures finished lower on Friday, ending a streak of solid gains in the last three sessions as the dollar rose and crude oil weakened.
Most-active gold for April delivery on the COMEX division of the New York Mercantile Exchange settled down $3.50 at $652.00 an ounce, after bottoming at $650.00. It hit a session high of $659.80.
Gold futures rose early after encouraging U.S. job data eased worries over economic weakness and some analysts speculated inflationary concerns may have lured in buying.
George Gero, vice president at RBC Capital Markets Global Futures, said that sell-stops pushed the April contract lower after an early rally and that institutional interest had improved in gold.

Gero said position squaring by investors ahead of the weekend weighed on the market.
The April contract has gained nearly $20 from its six-week low of $634.50 on Tuesday.
Trading was moderate with volume estimated at 25,000 contracts, and options turnover at 18,000. Turnover in the Chicago Board of Trade's electronically traded 100-oz gold contract was 38,150 contracts as of 2:21 p.m. EST (1921 GMT). (http://www.cbot.com/cbot/pub/page/)
The U.S. economy added 97,000 jobs in February, the smallest gain in two years, but job growth in prior months was revised higher and the unemployment rate dropped.

Unemployment rate drops to 4.5 percent

WASHINGTON (AP) - The nation's unemployment rate dipped to 4.5 percent in February even as big losses of construction and factory jobs restrained overall payroll growth. Wages grew briskly.
The latest snapshot, released by the Labor Department on Friday, offered a somewhat mixed picture of the employment climate.
The slight decline in the politically prominent jobless rate, from 4.6 percent in January, came as hundreds of thousand of people left the work force for various reasons.
Employers, meanwhile, added 97,000 new jobs to their payrolls in February, the fewest in two years, as bad winter weather forced construction companies to slash 62,000 jobs, the most since 1991. Factories, feeling the strain of the troubled housing and auto industries, also continued to cut jobs. They eliminated 14,000 positions last month.
On a more encouraging note, job gains in the previous two months turned out to be stronger than previously estimated. Employers added 226,000 new jobs in December, versus the 206,000 last estimated. Payrolls grew by 146,000 in January, up from a previous estimate of 111,000.
The new tally of jobs added to the economy in February was close to economists' forecast for a gain of around 100,000. They had predicted the unemployment rate would hold steady at 4.6 percent.

Metals - Gold dips as strong US economic data benefits the dollar

LONDON (AFX) - Gold edged slightly lower after strong US payrolls data and a decline in the the January trade deficit boosted the dollar and lessened the metals appeal as an alternative asset to the US currency.
The Labor Department said the US economy added 97,000 jobs in February. Though analysts had initially expected a similar reading of 100,000, many had begun to revise down their forecasts ahead of the data release.
The dollar benefited from the payroll figure and also from data showing the trade deficit fell to 59.1 bln usd in January, down by 3.8 pct from a December deficit of 61.5 bln usd.
"The dollar has been strong all this morning and I think that has got the better of the gold market to be frank. I think the economic data was interpreted as dollar friendly," said HSBC analyst James Steel.
At 12.43 pm, spot gold was quoted at 651.40 usd an ounce. In mid-day trade, the metal was quoted at 653.30 usd an ounce.
Gold initially edged up after the payrolls data was released, as the metal has recently departed from its traditional inverse relationship with the dollar and has even been moving in step with economic indicators and equity markets.
Falls in equity markets and global economic uncertainty usually benefit gold.
Last week, however, the metal fell sharply amid a global equity markets rout that was sparked by a 9 pct plunge in the Chinese stock market - the largest one day decline in a decade.
Kitco analyst Jon Nadler said there are some signs market conditions could be returning to a more 'normal' environment, even though he remained cautious on the outlook for equities and the global economy.
"The correction (if that is what it will ultimately be labelled as) still looks like a warning bell of larger future events," he said.
He added for gold to continue its up trend, it will have to "call upon its old friends: oil, the dollar, and interest rates to find better correlations and get away from the slightly perverse focus on rising equity markets".