Investing.com - Gold futures declined on Thursday, falling to the lowest levels of the session as the euro tumbled against the U.S. dollar following comments from European Central Bank President Mario Draghi.
Market players now looked ahead to Friday’s closely-watched U.S. nonfarm payrolls data for hints regarding the direction of U.S. monetary policy.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,246.25 a troy ounce during U.S. morning hours, down 0.7% on the day.
Comex gold traded in a range between USD1,244.45 a troy ounce, the daily low and a session high of USD1,257.15.
Gold futures were likely to find support at USD1,180.35 a troy ounce, Friday’s low and a 34-month low and near-term resistance at USD1,276.05, the high from June 26.
Speaking at the ECB’s post-policy meeting press conference, Draghi said that the central bank’s monetary policy will “remain accommodative as long as needed”.
He added that rates will stay low for an “extended period of time.”
Draghi’s comments came after the ECB held its benchmark interest rate at a record low 0.50% in July, in line with expectations.
The comments weighed heavily on the euro, with the single currency tumbling to a five-week low against the U.S. dollar.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.8% to trade at 84.06, the strongest level since May 29.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Gold traders now looked ahead to Friday’s highly-anticipated U.S. nonfarm payrolls data for indications of how the recovery in the U.S. labor market is progressing.
Data on Wednesday showed that the U.S. private sector added 188,000 jobs in June, more than expectations for an increase of 160,000.
Any improvement in the U.S. economy was likely to reinforce the view that the Federal Reserve will begin to taper its bond purchase program in the coming months.
Gold prices are on track to post a loss of almost 24% on the year, amid speculation the Fed will start to unwind its bond purchasing program in the coming months.
Gold prices fell to a 34-month low of USD1,180.35 a troy ounce on June 28.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.
Elsewhere on the Comex, silver for September delivery tumbled 1.7% to trade at USD19.44 a troy ounce, while copper for September delivery fell 0.8% to trade at USD3.149 a pound.
Trade volumes were expected to remain light on Thursday, with markets in the U.S. closed for the Independence Day holiday.