Gold Tumbles As Draghi Comments, US Data Lift Dollar Ahead Of NFP Report

FRANKFURT (Aug 2)  Gold extended losses on Friday trading session, ahead of U.S. nonfarm payrolls later in the session, while the lack of monetary easing from major central banks slashed buying interest in gold.

• As of 03:30 ET, gold dropped 1.76 percent or 23.09 points to $ 1,289.03
• Silver for immediate delivery fell 1.95 percent or 0.38 points to $ 19.30
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Gold extended losses set in the previous session as bullion was weighed down by the Bank of England and European Central Bank meetings where both banks refrained from adding stimulus on signs of economic improvement.

The European Central Bank chief, Mario Draghi said euro-zone key interest rates will remain at a record low 0.5 percent or lower levels for 'an extended period of time.' Draghi's comments came a day after the US central bank ended a policy meeting without any sign that its bond-buying program would end soon.

The Bank of England also decided in its policy meeting on Thursday to keep both interest rate and asset purchases on hold on signs of progress from the economy. Accommodative policy is generally seen as supportive for gold, because printing money tends to be inflationary.

• Spot platinum declined 1.14 percent to $ 1,424.85
• Spot palladium lost 0.80 percent to $ 726.00
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Gold tumbled Thursday as U.S. dollar climbed further following news that the Institute for Supply Management’s July manufacturing index jumped to the highest in two years, and initial jobless claims dropped to the lowest level in over 5 years.

Dollar benefited from expectations the Federal Reserve will curb ultra-loose monetary policy before other central banks, given strong U.S. manufacturing data and dovish comments from the European Central Bank.

The latest economic data from the U.S were cheerful as it showed progress in the manufacturing sector, besides a decline in jobless claims, fueled optimism about the coming nonfarm payrolls report. Upbeat data on the economy often draws attention away from the perceived safety of precious metals.

U.S. Labor Department said on Thursday that initial jobless claims fell to a five-year low last week, while a reading on manufacturing activity expanded in July at the fastest pace in 13 months.

Investors will be waiting for U.S. jobs data for more clues on the health of the world's largest economy, where strong data could prompt the U.S. Federal Reserve to end its bullion-friendly bond-buying program earlier than expected.

As of (10:32 GMT+3), the dollar index traded around 82.40 after opening at 81.39; USDIX hit a high of 82.53 and a low of 81.39.