Gold Prices Pare Weekly Decline in London Before U.S. Jobs Data

London (Apr 4)  Gold pared a weekly decline in London after prices held above a technical level and as investors awaited U.S. payrolls data that may show the fastest jobs growth in four months.

Data today may show employers added 200,000 positions last month, according to economists surveyed by Bloomberg. The Bloomberg Dollar Spot Index that tracks the U.S. currency versus 10 major counterparts was little changed after reaching the highest in more than a week yesterday. Gold has been supported above about $1,280 an ounce since yesterday, according to MKS (Switzerland) SA.

Federal Reserve Chair Janet Yellen said this week that slack in labor markets showed accommodative policies will be needed for some time, after last month saying the central bank may end bond buying this fall and raise borrowing costs six months after that. Bullion slipped 28 percent last year, partly on the outlook for reduced stimulus.

“For two days in a row, gold’s been trying to break below $1,280 and each time fails, that’s why the market is a bit higher,” Afshin Nabavi, a senior vice president at bullion refiner MKS in Geneva, said today by phone. “A few buyers have orders around that area. The jobs numbers are very important.”

Bullion for immediate delivery added 0.4 percent to $1,291.93 an ounce by 10:56 a.m. in London, according to Bloomberg generic pricing. Prices lost 0.3 percent this week after sliding to $1,277.79 on April 1, the lowest since Feb. 11. Gold for June delivery was 0.6 percent higher at $1,292.20 on the Comex in New York. Futures trading volume was 45 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.

ETP Holdings

Holdings in gold-backed exchange-traded products fell 2.9 metric tons yesterday to 1,752.9 tons, data compiled by Bloomberg show. Assets fell 12.9 tons so far this week, set to be the most since December.

Bullion slipped 3.2 percent last month in the first such decline this year. Australia & New Zealand Banking Group Ltd.’s physical gold demand gauge accelerated toward the end of March, it said this week. China was last year’s biggest bullion buyer.

“China’s demand for gold may pick up after gold’s recent price decline,” James Steel, a metals analyst at HSBC Securities Inc. in New York, wrote in a note e-mailed yesterday. “This may help stem the potential for further losses.”

Iraq’s central bank said it bought 60 tons of gold in the last two months as it aims to diversify its reserves and support the value of the Iraqi dinar. It said its bullion holdings increased to 90 tons. That would place it within the 40 largest holders by country, according to data from the World Gold Council.

Source:  BusinessWeek