FRX: Gold hovers below 11-month high; U.S. jobs data in focus
Forexpros - Gold futures were higher during U.S. morning hours on Wednesday, trading below an 11-month high hit earlier in the week, as market participants looked ahead to Friday’s crucial U.S. non-farm payrolls data, which will allow investors to gauge the strength of the labor market.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,780.25 a troy ounce during U.S. morning trade, adding 0.25%.
Prices were stuck in a narrow trading range of USD1,773.15 a troy ounce, the daily low and a session high of USD1,783.85 a troy ounce. Gold futures rallied to USD1,793.85 a troy ounce on October 1, the highest level since November 14, 2011.
Gold prices were likely to find support at USD1,739.35 a troy ounce, the low from September 26 and near-term resistance at USD1,793.85, the high from October 1.
Payroll processing firm ADP said in a report earlier that U.S. non-farm private employment increased by a seasonally adjusted 162,000 in September, surpassing expectations for an increase of 143,000.
The previous month’s figure was revised down to a gain of 189,000 from a previously reported increase of 201,000.
Also Wednesday, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 55.1 in September from a reading of 53.7 in August.
However, the report’s Employment Index declined to 51.1 from 53.8
Market participants now looked ahead to Friday’s crucial U.S. non-farm payrolls data, after Federal Reserve Chairman Ben Bernanke pledged to sustain stimulus even after the U.S. economy recovers in a speech earlier in the week.
The Fed said last month it will purchase USD40 billion of mortgage-backed securities every month until the labor market improves.
Meanwhile, traders continued to focus on developments in Spain after Prime Minister Mariano Rajoy on Tuesday ruled out a bailout request before this weekend, despite persistent speculation that Madrid was moving closer to requesting external financial aid.
Markets have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation.
Elsewhere on the Comex, silver for December delivery added 0.3% to trade at USD34.76 a troy ounce, while copper for December delivery fell 0.8% to trade at USD3.771 a pound.
