Photo: REUTERS
Gold is trading at $1 416,30 in early trade on Friday as better than expected jobs data expected.
| RUJUN SHEN |
Published: 2011/03/04 10:11:52 AM |
Spot gold held steady on Friday, consolidating after falling more than 1% in the previous session, as investors await a key US job market report to assess the health of the world’s top economy.
US non-farm payrolls data at 1330 GMT on Friday were estimated to rise by 185 000 jobs, according to economists polled by Reuters.
"If the payrolls data surprises on the downside, gold prices will continue to be supported," said a Tokyo-based trader. "If it is better than expected, it may put some pressure on prices."
Spot gold was little changed at $1 416,30 an ounce by 0716 GMT, poised for a minor gain of half a% after a choppy week.
US gold futures was steady at $1 416,80 an ounce.
Price of bullion fell by as much as 2% during a cross-commodity sell-off sparked by falls in oil following news of a proposed Venezuelan-brokered peace plan for Libya.
That news sent Brent crude oil prices falling by more than $3 dollars in around an hour, before paring about half the loss on analyst scepticism about the success of such a plan.
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Gold is seen consolidating around current levels, as investors who hold bullish views on bullion take advantage of the price fall in the previous session.
"Inflationary fears globally will remain for the medium-long term, especially as inflation in large developing economies such as China, India and Brazil is already running high," said Li Ning, an analyst at Shanghai CIFCO Futures.
She warned, however, some correction could take place after gold’s strong rally over the past month or so. But, she said, gold should find strong support at the $1 400 level.
Technical analysis showed that gold might be embarking on a correction which could extend to $1 374 next week, according to Reuters market analyst Wang Tao.
The euro was steady versus the dollar on Friday after ECB President Jean-Claude Trichet dropped a bombshell on markets Thursday explicitly saying an interest rate hike at the next meeting is possible, sending the single currency to a near four month high.
A "twenty or thirty basis point hike in interest rates is unlikely to tame inflation," said the Tokyo-based trader.
He added that the market was looking for signs whether the United States would complete the second phase of quantitative easing, cut it short, or even launch a third round of debt purchases.
Spot palladium fell nearly 2% at $798,03 an ounce, after the CME Group announced it will raise the margin requirements on NYMEX-traded palladium by 25%, effective after the close of business on March 4.
The most active NYMEX palladium declined 1,5% at $803,00.
I-NET BRIDGE
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