Gold Slightly Rebounds Before U.S. NFP Data

Precious-Gold slightly rebounded on Friday ahead of the awaited U.S. nonfarm payrolls report which is likely to weigh on the Fed’s plan to win down stimulus. Gold is currently trading around $1371.70 an ounce, after hitting a high of $1373.68, and a low of $1365.43.The shiny metal is probably heading for a second straight weekly decline this week, where the drop was buoyed by the breach of strong support at $1400.

A report released yesterday showed that Private-sector employers added 176,000 jobs last month from 198,000 in July.The nonfarm report due today is estimated to show that U.S. employers added 180,000 jobs last month compared with 162,000 jobs a month earlier, while unemployment rate lingered at 7.4 percent.

The report is highly predicted to weigh on gold prices, as a better-than-forecasted data is likely to push prices down. And, it will raise expectations of seeing a start in withdrawing QE to $65 billion a month in the coming Fed meeting on September 17-18.

Gold has lost 18% so far this year on mounting expectations the Fed would scale back its non-standard measures, thereby reducing the metal’s allure as a hedge against inflation. So far, gold has dropped 1.54% this week, heading for its second weekly decline to halt its rally that ended after hitting a high of $1433.45 on August 27.

On the political side, gold also is affected by the delay in the military strike on Syria, and especially since U.S. President Barack Obama has mentioned that the strike will be limited. In other words, just a punishment to al-Assad for his suspected use of chemical weapons against civilians. According to a report by the BBC, “G20 leaders remain divided over the Syrian conflict as they enter the final day of their Russian summit.”

After yesterday’s sharp rise, the dollar index, which tracks the dollar’s movements versus a basket of major currencies, dropped to hover around 82.54 after touching a high of 82.67.