RTRS: PRECIOUS-Gold steady ahead of U.S. jobs data
Gold was steady in Europe on Friday as traders took to the sidelines ahead of key U.S. jobs data later in the session, though fresh inflows into the world's biggest exchange-traded fund showed strong investor demand. Spot gold was at $912.50/914.50 an ounce at 1011 GMT, against $913.75 late in New York on Wednesday.
Gold is benefiting from a flight to safety among fund investors spooked by volatility in other asset prices. Falling interest rates around the world are also reducing the opportunity cost of holding bullion.
"When you have central banks reducing the cost of money, it makes sense for funds to move into the alternative to money, and that is gold," said CMC Markets analyst Ashraf Laidi.
On Thursday, an interest rate cut from the Bank of England, signs that the European Central Bank may resume rate cutting next month, and weaker than expected U.S. economic data fuelled a 1 percent rise in gold prices.
The SPDR Gold Trust, the world's largest exchange-traded fund, said its bullion holdings rose to a record 867.19 tonnes that day. [ID:nSP160190]
ETFs, which issue securities backed by gold bullion, have proved popular with investors seeking the safety of precious metals without the drawbacks of holding coins or bars.
The market is now eyeing U.S. January non-farm payrolls data due at 1330 GMT, which is likely to set a fresh direction for trade. Analysts polled by Reuters expect the U.S. economy to have lost more than half a million workers last month [ID:nN04455795].
"Precious metals... enjoyed fund flows as safe-haven assets were sought out," said Standard Bank analyst Manqoba Madinane. "A negative non-farm payrolls number today could extend this trend.
"Although precious metals might still benefit, U.S. dollar resilience could constrain upside potential," he added.
The dollar, typically a key external driver of gold, has become less of a direct influence as risk aversion has increased.
While gold usually moves in the opposite direction to the dollar, both bullion and the U.S. currency are being sought out by investors as "safe" assets.
The dollar was little changed against the euro on Friday after the ECB opted to keep interest rates on hold on Thursday, though it indicated more easing next month.
