FYX: Gold Prices Fall Slightly Ahead of Nonfarm Payrolls Data, Silver Prices also Slip
Gold prices slid on Friday after reaching to a six-month high in the previous session as better than expected labor market data released on Thursday raised fears that the Federal Reserve might stop short of offering QE3 even as investors will keenly wait for nonfarm payrolls data for August. Silver prices also edged lower on Friday.
Earlier on Thursday, gold prices gained following the European Central Bank (ECB) President Mario Draghi’s announcement for unlimited bond purchase program for struggling sovereigns, boosting the euro against the dollar.
Nevertheless, the gains made were limited as two separate job reports from U.S. weighed on bullion investors’ sentiment. While ADP’s report showed that private sector added more jobs than economists had expected, weekly jobless claims also fell to a one-month low.
Even though Ben Bernanke during Fed’s annual symposium on last Friday hinted at another round of quantitative easing, citing weakness in job market and overall economy, analysts are worried that central bank might shove off its economic stimulating plans for the time being in the wake of recent economic indicators, which have been better-than-expected.
Now, all eyes will remain focused on nonfarm payrolls data for August. It is widely anticipated that this data will influence Fed’s final decision on QE3 when it meets next week.
In the previous report (July) 163,000 new jobs were added which beat analysts’ estimations by a long margin. For August, a survey conducted by Reuters shows that economists are expecting 125,000 new job additions.
U.S. gold futures for December contract fell 0.39%, to $1696.60 an ounce while spot gold slipped 0.3% to trade at $1,695.89 ounce, at last check.
Meanwhile, holdings in gold backed exchange traded funds hit a record high to 2,044 tons by Thursday, a data provided by Reuters showed.
Spot silver edged down 0.4 percent to $32.50, and spot platinum fell 0.5% to $1,567.50 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 1.39%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 2.78%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) was down 2.92%.
