The gold price remained just above one-month lows on Friday morning, with all eyes on Friday’s crucial US jobs report, which is likely to define the metal’s near-term direction.
Spot gold was last at $1,175.00/1,175.80 per ounce, down 90 cents on the previous session’s close – the metal hit its lowest in a month at $1,172.60 on Thursday.
US non-farm payrolls data is forecast to show that the country created 226,000 new jobs in May, up from 223,000 previously, while the unemployment rate is predicted to remain at 5.4 percent and average hourly earnings are expected to improve 0.2 percent.
US indicators have increased in importance while observers seek signs of an economic rebound in the second quarter. The Federal Reserve identified US jobs data as one of the key factors on its decision when to raise interest rates from near zero, where they have been since 2008.
A forecast-beating number could pressure gold lower, raising the likelihood of US monetary policy normalisation in the near term, though much of the action has been priced in for some time.
“I have a niggling feeling that gold is extremely vulnerable at the moment and that a good NFP number this afternoon could see it finally break out of the recent range and take us down to the $1,150 area,” Marex Spectron’s David Govett said.
Greece is also in focus after Athens delayed a 300-million-euro repayment to the IMF until the end of June, raising the risk of a Greek exit from the bloc. Sentiment has taken a hit across markets – the euro was around 0.5 percent softer against the dollar and major European bourses were down either side of 0.8 percent.
“With investor sentiment for gold so weak, gold prices may well continue lower but we do feel this is leading to a better buying opportunity. And given developments in Greece and with the potential for corrections in other asset classes, it may not be too long before the markets start looking for a safe haven again,” FastMarkets’ William Adams said.
The steep rise in European bond yields is weighing on gold prices, Commerzbank noted. Yields on 10-year German government bonds peaked at 1.0 percent, their highest in more than eight months. Higher bond yields make holding gold less attractive because gold does not pay any interest.
In the other metals, silver was last five cents higher at $16.14/16.19 per ounce and just above one-month lows while platinum was unchanged at $1,097/1,102, just above the near-three-month low hit in the previous session. Palladium was up $5 at $754/759.
(Editing by Mark Shaw)
The post Gold remains near 1-mth low, as all eyes on US jobs data appeared first on The Bullion Desk.
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