(Reuters) - On Thursday, gold declined slightly as investors waited for the results of a European Central Bank meeting (ECB) later in the day and also waiting for major U.S. jobs data on Friday that might impact monetary policy.
Volumes were estimated to stay thin during the day as traders were unwilling to take leading positions throughout the U.S. Independence Day holiday.
Marex Spectron head of precious metals David Govett said “When the U.S. is on holiday nobody does anything. There has been some selling this morning, but I don’t expect much more happening,”
Spot gold dropped 0.2% to reach $1,248.61 an ounce by 0941 GMT after achieving almost 1% on Wednesday. Gold futures at Comex for August were lost $3.20 to $1,248.70.
Gold has increased 7% since touching its lowest price in almost three years at $1,180.71 last Friday, but several traders interprets the gains as a typical short-term gathering that follows a significant decrease.
There was extensive compromise that the ECB would not hit rates or announce any new extra measures at its policy meeting later in the day.
ANZ Research stated “Current worries over Portugal could strengthen the case for stronger forward guidance by the ECB to ensure that interbank and funding concerns for the peripheral area do not intensify,”
Sentiment as well was protected ahead of Friday’s report of U.S. non-farm payrolls, which is predicted to show the economy created 165,000 jobs last month. The data might have an impact when the Federal Reserve will start tapering down its $85 billion monthly bond buying stimulus program.
Gold displayed its biggest quarterly loss on record in the April-June period, which was down by 23%. Selling was intensified by remarks from Fed Chairman Ben Bernanke last month that the U.S. economy was improving strongly enough for the central bank to start tapering on its stimulus at the end of the year.
That could support an increase in interest rates, which will make gold less attractive.