IV:Gold futures fell ahead of U.S. employment data
Investing.com - Gold prices fluctuated between small gains and losses during Asian trading hours on Friday ahead of closely watched reading on U.S. employment data.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,256.60 a troy ounce during Asian trading, down 0.03%.
On Thursday the gold futures traded at session low of USD1,252.60 and off a high of 1,258.30 to settle at USD1,257.00.
Futures were likely to find support at USD1,240.60 a troy ounce, Monday's low, and resistance at USD1,274.10, Wednesday's high.
The European Central Bank earlier voted to leave interest rates across the euro zone unchanged at a record-low 0.25%, but the common currency strengthened after ECB President Mario Draghi did not outline any new measures to shore up slowing inflation.
Draghi said the ECB sees a protracted period of low inflation, not full blown deflation, and reiterated that the bank is “monitoring developments closely" and won't likely make any decisions until the bank reviews more economic indicators, which markets interpreted as March at the earliest.
Deflationary concerns arose last week after data revealed that the annual rate of inflation slowed to 0.7% in January, which stoked expectations the ECB would either trim rates or leave policy unchanged but accompany it with dovish language.
The news sent the euro rising over the dollar, which boosted gold prices as the yellow metal tends to trade inversely with the greenback.
Meanwhile in the U.S., the dollar found some support after data revealed that the number of individuals filing for unemployment assistance in the U.S. fell more than expected last week.
The Labor Department said initial jobless claims fell by 20,000 to 331,000 from the previous week’s revised total of 351,000. Analysts were expecting jobless claims to fall by 16,000.
A separate report showed that the U.S. trade deficit widened significantly in December, as exports dropped 2.2% and imports rose 1.6%.
The numbers capped gold's gains by rekindling perceptions that the U.S. economy continues to recover and is in less need of Federal Reserve stimulus tools such as bond purchases, which weaken the dollar to spur recovery.
Investors were turning their attention to Friday’s U.S. nonfarm payrolls report for January, after poor U.S. manufacturing data earlier in the week sparked concerns over a possible slowdown in the economic recovery.
Growing sentiments that harsh winter weather may be bruising economic indicators and not waning demand have given the dollar some support and softened gold.
Meanwhile, silver for March delivery fell 0.08% and trading at USD19.918 a troy ounce, while copper futures for March delivery rose 0.11% at USD3.227 a pound.
