Gold set for 2nd weekly loss ahead of U.S. jobs data

by **hlk** Fri 08 Nov 2013, 21:30

Business & Markets 2013
Written by Reuters
Friday, 08 November 2013 19:45
A + A - Reset
(08/11/13 19:03:03)
* Gold above three-week lows hit on Thursday
* Gold down about 0.4 percent on the week
LONDON/SINGAPORE (Nov 8): Gold edged above three-week lows on Friday,
but was still set for a second week of losses, as the dollar steadied after a
European Central Bank's surprise interest cut and ahead of a crucial U.S. jobs
report.
Investors waited for monthly U.S. nonfarm payrolls data later on Friday, for
further direction and clues on the timing of the tapering of the Federal
Reserve's economic stimulus.
A strong number would increase expectations that the Federal Reserve will
start tapering its bond-buying programme sooner rather than later, particularly
after Thursday's robust U.S. growth figures.
An end to the Fed's quantitative easing programme would hurt gold, which has
been boosted by central bank liquidity and a low interest rates environment,
encouraging investors to put money into non-interest-bearing assets.
Economists polled by Reuters, expect 125,000 jobs to have been added in
October, although last month's 16-day U.S. government shutdown may affect
the figures.
"A relatively low number for the U.S. non-farm payrolls data, has already been
discounted by the market, but it is possible that we see a small uptick in the
employment rate to 7.3 percent," VTB Capital analyst Andrey Kryuchenkov
said.
"The market is today trying to consolidate, and if we don't get any surprise from the non-farm payrolls, we will probably hold here with
support at $1,300, and then $1,270," he added.
Spot gold edged up 0.1 percent to $1,308.89 an ounce, by 1053 GMT. The metal has lost 0.4 percent for the week so far, having hit a
three-week low of $1,298.31, on Thursday.
Comex gold futures for December was up $0.6 to $1,309.10 an ounce.
The dollar was near a seven-week high against a basket of currencies, also boosted by data on Thursday, showing U.S. gross domestic
product grew at a 2.8 percent annual rate in the third quarter — the quickest pace in a year.
Gold has lost about a fifth of its value this year, due to fears that the Fed would begin cutting back its $85 billion monthly bond purchases.
The metal's inflation-hedge appeal has been burnished by the bond purchases and low interest rates.
Investors had believed a prolonged budget battle in Washington in October, would prevent the Fed from withdrawing support for the
economy, and possibly push the tapering into next year. However, Thursday's GDP data rekindled fears of a roll-back at the Fed's
December meeting.
Spot silver rose 0.1 percent to $21.67 an ounce, having fallen to a three-week low of $21.36, in the previous session.
Spot platinum gained 0.2 percent to $1,451.50 an ounce.
The gold-platinum ratio could be set to ease further, after reaching a two-month earlier in the week, Societe Generale said in a note.
Spot palladium fell 0.5 percent to $754.72 an ounce. It reached its highest level since Aug 15, at $762.25 on Thursday