Gold prices were trading slightly lower on the London spot market on Thursday, as traders eyed employment data out of the US and clues on the direction of monetary policy from European Central Bank.
Spot gold was down 0.30 per cent at $US1,130 a troy ounce in morning European trade, having traded lower on Wednesday as the dollar traded higher and gains in equity markets tempered investor appetite for the haven asset.
On Thursday, Investors are focusing on upcoming data from the US non-farm payroll, due on Friday, said Simona Gambarini, a commodities economist at Capital Economics. The numbers are seen as a key indicator of the strength of the US economy.
"That's an important data point to establish whether the Fed will raise rates" this month, Ms Gambarini said. "So there's a bit of volatility because of that."
A rate rise could increase the dollar's value and make US Treasury Bills a more attractive investment. Gold competes better with interest-yielding assets when rates are very low. On Thursday, the WSJ Dollar Index, which measures the US dollar against a basket of currencies, was up slightly.
Market participants were also awaiting the press conference from the European Central Bank that will follow the September meeting of the currency bloc's members. The conference will begin at 1230 GMT in Frankfurt.
Investors will be watching to see whether ECB President Mario Draghi will increase or extend the bank's quantitative easing program, according to Commerzbank. QE typically keeps interest rates lower, while releasing more cash into the economy, potentially stoking inflation. By comparison, gold is a hard asset than can hold its value comparatively well and is used as a hedge against inflation.
"This could give the gold price in euros a boost," the bank said in a daily note.
Still, analysts predict a quiet end to the week after days of volatility in this, and other, metals. A national holiday in China is expected to limit trading in Asia.
The other precious metals were up on Thursday. Spot silver was up 0.27 per cent at $US14.72 an ounce, while spot platinum was up 0.10 per cent at $US1,014.60 an ounce and spot palladium was up 0.69 per cent at $US587.40 an ounce.
