Gold prices dropped on Friday, May 4, as the dollar strengthened ahead of key U.S. jobs data that is
expected to underline a strong economy and support the case for more interest rate increases.
Spot gold was down Tumbled an ounce at 0930 GMT, heading for a third consecutive weekly decline, while U.S. gold futures for June delivery fell by 0.2 percent to $1,309.70.
U.S. employment data due at 1230 GMT is likely to show that jobs growth accelerated in April after a weather-related slowdown the previous month. Unemployment, meanwhile, is expected to be near a 17-1/2 year low of 4 percent.
Analysts said a strong outcome is already priced in by the market, so gold was unlikely to move much if non-farm payrolls increase by 192,000, in line with the consensus in a Reuters poll of economists.
“But if there is a surprise, and it comes in quite positive and the dollar appreciates, gold is likely to come under pressure again and we don’t rule out a test of the $1,300 mark,” said Commerzbank analyst Daniel Briesemann.
“Even if gold dips below $1,300, the past has shown that there is buying interest below that level, so we don’t expect gold to drop significantly for the moment.”
Expectations of a robust U.S. jobs report supported the dollar index , which weighed on gold. A stronger dollar makes commodities priced in the greenback more expensive for buyers using other currencies.
The dollar was on track for a weekly gain of about 1 percent.Spot gold is biased to bounce to resistance at $1,326 an ounce, as suggested by a projection analysis and a falling channel, said Reuters technical analyst Wang Tao.
Holdings in the SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, fell by 0.13 percent to 865.60 tonnes on Thursday.
Among other precious metals, spot silver fell 0.1 percent to $16.39 an ounce. Among platinum-group metals, mainly used for catalysts that clean pollution from car exhaust, platinum shed 0.2 percent to $898 an ounce and was on track for a third weekly fall.
Palladium added 0.2 percent to $963.90.Palladium is mostly used in catalysts for petrol vehicles
while platinum is largely used in diesel cars.
