Gold near 1-week low ahead of US jobs data
Gold held near its weakest in a week on Friday as cautious investors and jewellers stayed on the sidelines ahead of the release of a US payrolls report, which could revive hopes of a third round of US Federal Reserve bond buying.
Gold held near its weakest in a week on Friday as cautious investors and jewellers stayed on the sidelines ahead of the release of a US payrolls report, which could revive hopes of a third round of US Federal Reserve bond buying.
The closely-watched report is expected to show a gain of 170,000 in April, according to a Reuters poll of economists, but investors are braced for lacklustre job growth last month following a trail of weak US indicators.A weaker-than-expected gain in the widely-watched US data could hit the dollar as it would raise expectations of a third round of quantitative easing to stimulate the economy, boosting gold's safe-haven appeal.Gold hardly changed at USD 1,636.30 an ounce by 0329 GMT, having dropped on Thursday to its lowest since April 25 at USD 1,630.70 after US data showed services employment declined in April to its lowest level since December."Whether or not the data is going to be bad, the market is still in a range trade. The upside is a bit limited for a little while. Nobody wants to enter the market, said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong."We have to see physical buying coming back before gold can stabilise. Otherwise, we can test USD 1,625 again. We don't know when the Indians will come back."A weak rupee, which makes dollar-priced gold more expensive for buyers in India, has curbed sales in the world's largest consumer of bullion. Most jewellers are also well-stocked after lower-than-expected sales on auspicious Akshaya Tritiya, which fell on April 24.US gold added USD 2.20 an ounce to USD 1,637 after hitting a 1-week low on Thursday on a steadier euro and as investors turned their attention to the payrolls data after the ECB kept rates steady at 1% as expected.Cash gold rallied to a record of around USD 1,920 last September on fears the euro debt crisis could spiral out of control and stall global growth.In addition to the US jobs data, the euro faces additional event risk from elections in France and Greece on Sunday, the results of which could stir worries about the countries' commitment to fiscal austerity.In Singapore, a centre for bullion trading in Southeast Asia, dealers noted limited physical buying from interest from Thailand and Indonesia, while India remained on the sidelines."I heard Indian jewellers are planning another strike. There's not much coming or going into India lately. We've only managed to sell a small amount of silver," said a physical dealer."Well at times like this, you want to be the first person that a customer will call. Alternatively, you can sit back and wait," he added.Jewellers in India called off their three-week-old strike in early April on assurances from Finance Minister Pranab Mukherjee that the government would consider scrapping a budget proposal to levy excise duty on unbranded jewellery. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
