Gold Slightly Lower on Investor Caution Ahead of ECB and U.S. Data Release


(Reuters) – Gold bordered smaller on Thursday, strike by concern over the likely conclusion of a European Central Bank meeting and a set of U.S. financial data and figures which could give clues on when the Federal book will start revolving back its monetary incentive.

U.S. July-Sept GDP data and figures and primary jobless claims are due at 01:30 p.m GMT. But analysts say Friday’s U.S. jobs report for October may supply the most telling insight into the impact of a government shutdown last month that may provoke an expanded continuation of Fed bond-buying which undermines the dollar.

A lower dollar makes assets like gold that are denominated in the U.S. currency lower and more appealing for investors. Therefore profits for the euro versus the dollar have tended to support the metal.

Credit Suisse analyst, Karim Cherif, says: “Gold has been in a downtrend for a long time and investors are expected to look at any financial data that could give direction”.

Furthermore, he said “Today the major aim is on the ECB for the currency connection, but the U.S. payrolls data is going to be significant and a contradictory footprint would re-launch a consideration on when Fed tapering will start.”

Gold in the spot market was down 0.2% at $1,314.60 an ounce by 11:03 a.m. GMT, after profiting 0.5% on Wednesday, when it broke seven consecutive days of deficiency. Traders see technical support now pegged between $1,310 and $1,300, while short-term resistance stands at $1,350. The yellow metal has been stuck in between $1,306-$1,321 an ounce variety this week

Comex gold futures for December lost $3.30 to reach the price of $1,314.40 per ounce.

The euro hovered near one-week highs against the dollar ahead of a European Central Bank policy setting assembly subsequent on Thursday.

A pointed drop in euro zone inflation last week advanced speculation the ECB could contemplate cutting interest rates underneath the present 0.5 percent level, but a run of robust data in the last few days, pointing to a stepwise if still weak recovery, have reduced the possibilities of any move. That was supporting the euro on Thursday.

“We still accept as true the (gold) market is prone to further deficiency with macro headlines and the dollar dominating trading,” VTB Capital said.

Holdings of the SPDR Gold Trust, the biggest of the Exchange Traded Fund (ETF) which permit investors to speculate without actually buying gold, increased 2.1 tonnes to 868.42 tonnes on Wednesday – the first increase since Oct. 22 where it increased by 6.6 tonnes.

SPDR holdings, whose buys of gold are a reflection of an increasing shareholder interest gold, has seen over 450 tonnes in outflows this year, 33.97 tonnes just on October 2013, driving holdings to their lowest since early 2009.

Such outflows from gold ETFs have had an important influence on charges this year. Anticipating a scale back in incentive measures, investors have been moving money out of gold and into equities.

Silver price in the spot market fell 0.1% to $21.76 an ounce.

Platinum price in the spot market profited 0.1% to $1,462.99 an ounce, and spot palladium dropped 0.7% to $756.72 an ounce, hitting its largest grade since Aug. 15 at $762.25 in previous trade.