Gold prices traded slightly lower on Friday, ahead of the most awaited U.S. nonfarm payrolls figures due later in the session. The closely-watched employment data holds implications for the yellow metal through its influence over Federal Reserve policy and the greenback.
Spot gold is currently trading at $1,283.59 down 0.08 percent, 1.04 point after opening and intraday high levels at $1,284.93 while hitting low at $1,281.52.
The metal is expected to face support at $1,276.97 and resistance at $1,306.78. A break below critical support at $1,276.93 would open up an extended drop to the next definitive level at $1,240.25.
Gold prices turned lower in Asia, heading for its second weekly drop in three weeks on growing optimism about the U.S. economy despite the weak 0.1 percent first-quarter growth, while still weighed by news the Federal Reserve pared its monthly bond-buying program.
The Feds opted to go further with cutting its asset purchases program, though prices didn`t plummet as a $10 billion cut to the stimulus program came as little surprise to many. While separate data showed U.S. economy barely grew in the first quarter of the year, coming at an annual rate of 0.1 percent.
The Feds, however, suggested that rough winter weather made the economy look worse than it was tarnished gold`s appeal.
Another disappointing reading from the U.S. economy would likely sink the U.S. Dollar and as such could act as the saving grace for gold.
As of 10:08 GMT +3, dollar traded lower at 79.50 after opening at 79.56. The USDIX so far recorded an intraday high at 79.60 and low at 79.49.
Later in the day for further clues on the economy. Traders are bracing for a strong April nonfarm payrolls report after strong figure from private payrolls processor (ADP) helped firm ideas of a pickup in hiring.
U.S. nonfarm payrolls report is expected to show employment rose at its fastest clip in five months in April and the jobless rate probably dropped.
Expectations for Friday’s nonfarm report now runs for a 210,000 new jobs created, and an unemployment rate of 6.6 percent. In March, the U.S. created 192,000 jobs and the unemployment rate was 6.7 percent.
As of 3:50 EST, other metals traded as the following:
- Silver was up 0.01% to trade at $19.05
- Platinum decline 0.21%, 3.00 points to $1,421.75
- Palladium edged 0.06%, 0.50 points up to $814.05