Gold eases as U.S. equities rally, nonfarm payrolls eyed
London (Feb 7) Gold prices fell slightly on Thursday as Wall Street rallied, but losses were limited by the euro's gain versus the dollar and caution ahead of the key U.S. nonfarm payrolls report on Friday. The metal initially rose on a stronger euro after European Central Bank President Mario Draghi said there is no euro zone deflation problem, following the bank's decision to leave interest rates unchanged. Bullion later came under pressure after data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week, a sign that the job market and the broader economy are improving. The S&P 500 equities index rose more than 1 percent. "As the equities market rallied, gold slowly gave back early gains from dollar weakness. It is not surprising that gold is lingering around unchanged with the major nonfarm payrolls report coming out tomorrow," said David Meger, director of metals trading at Chicago futures brokerage Vision Financial. Spot gold was down 30 cents at $1,257.35 an ounce by 2:28 p.m. EST (1928 GMT). On Wednesday, gold rose almost 2 percent to a near two-week high of above $1,270 after a disappointing U.S. ADP private-sector job report, but it quickly fell back from that level. U.S. COMEX gold futures for April delivery settled up 30 cents at $1,257.20 an ounce. Trading volume was only 85,000 lots, about 55 percent below its 250-day average. Investors are now eyeing the Friday release of U.S. nonfarm payrolls data, a key gauge of the labor market, as any setback in economic growth could prompt the Federal Reserve to slow the pace of its stimulus tapering.
INVESTMENT INTEREST Concerns about the fragility of stock markets after a heavy selloff in recent months has piqued some investors' interest in gold, with the world's largest bullion-backed exchange-traded fund, the SPDR Gold Trust, reporting a 3.9-tonne inflow on Tuesday. But holdings remained unchanged on Wednesday. Platinum was down 0.4 percent at $1,370.82 an ounce. In South Africa, government-brokered talks between mine union AMCU and the world's three biggest platinum producers to end a two week wage strike have been adjourned to allow for individual consultations. Silver edged up 0.3 percent to $19.92 an ounce after its previous session's 2 percent gain - its biggest one-day jump in nearly a month. Palladium eased 0.3 percent to $698.60 an ounce.
(Source: CNBC)
