Gold price pulls back as traders eye ECB

New York (Jun 3)  Gold prices slipped Wednesday as the market assessed a U.S. private-sector jobs report and analysts pointing to expectations that the European Central Bank might not offer as much stimulus as expected as the eurozone’s outlook improves and inflation climbs to a healthy level.

If upbeat readings on eurozone inflation persist, the ECB “may not after all pump as much liquidity into the market as it had announced,” said analysts at Commerzbank Commodity Research in a note Wednesday. The stronger-expected-reading on consumer prices that came out Tuesday also was helping to push prices lower for German government bonds.

“Market participants will be keeping an eye on the ECB’s meeting today, though we do not expect it to send out any new signals to the markets,” the Commerzbank analysts added.

Check out MarketWatch’s ECB live blog: Mario Draghi in the hot seat

Gold futures for August delivery GCQ5, -0.27%  were last down $5.20, or 0.4%, to $1,189.20 an ounce, while July silver SIN5, -1.18% lost 25 cents, or 1.5%, to $16.55 an ounce.

On Tuesday, gold settled higher, boosted in part by a decline in the dollar and concerns about Greece’s debt woes. The dollar index DXY, -0.41%  was gaining Wednesday.

In U.S. economic news on Wednesday, a reading on private-sector hiring came in below expectations, but still showed a pick up from the prior month. In addition, a report said the U.S. trade deficit shrank 19.2% in April after hitting a seven-year high in March.

Investors also will be looking next toward Friday’s nonfarm payroll report to gain a better sense of the health of the U.S. economy, which could also factor into gold’s moves.

In other metals trading, July platinum PLN5, -0.24% dropped $2.40, or 0.2%, to $1,110.40 an ounce, while September palladium PAU5, -0.59%  shed $7.50, or 1%, to $761.05 an ounce.

July copper HGN5, -0.09%  was little changed at $2.73 a pound.

Source: MarketWatch