Gold Takes A Break; Will NFP Offer Trigger To December Tapering?

Gold was little changed but still ready to post a weekly slide early Friday, with all eyes focused on the upcoming release of US non-farm payrolls (NFP) data for November.

The most hectic day of the week has finally came to bring first-tier data from the world`s largest economy; NFP number, due to be released later Friday, offering bullion junkies the key that might unlock the doors on a possibly looming reduction of monetary stimulus by the Federal Reserve in its next meeting this month, which markets have been pricing in the past few months amid improving US economic data.

Spot Gold was up 0.53% at $1,231.85 an ounce as of 02:30 a.m. EST, compared with yesterday`s close at $1,225.23.

November NFP release from the US Labor Department is the most improtant release at the end of the year, as the Fed linked a tapering of its bullion-friendly stimulus to tangible rally in labor market, and so far, the jobs front had offered a quite reliefing tone for the fourth quarter of the this year, which might relax the Fed to start reducing its $85 billion of monthly bond purchases.

Unfortunately, Fed Chief Ben S. Bernanke is not totally convinced to slow quantitative easing program following the strong October jobs report, even after recent data showed the economy added an average of 200 thousand jobs each in the last three months.

At 08:30 a.m. EST, the US employment report may show that economy added 185 thousand jobs to NFP in November, compared with October`s strong increase of 204 thousand. Correspondingly, the unemployment rate probably fell to 7.2% last month, a five-year low according to records.

Any NFP surprise will no doubt boost the case for stimulus tapering as early as this month. However, a soft report will most likely offset bets of December tapering into 2014.

Will US payrolls bolster the case for the Fed to start scaling back its quantitative easing? We`ll find out today! The upcoming trigger for the yellow metal is on the way!