Gold edged higher on Friday, as the dollar cut earlier gains against the euro and the yen and European shares dropped as investors anticipated potentially weak U.S. non-farm payrolls data.
The metal according to Reuters report matched a similar pattern in other commodities, such as copper, further recouping heavy losses seen in the previous session, as investors refrained from taking large bets.
Gold edged up 0.4 percent to $1,558.40 by 1137 GMT, but it was still down about 1.6 percent on the week and heading for its second week of declines. It fell to a 10-month low at $1,539.74 on Thursday, hurt by a jump in the dollar after the Bank of Japan unveiled ambitious monetary stimulus plans. U.S. gold futures for June delivery was up 0.1 percent to $1,555.20 an ounce.
“The market is on hold ahead of the non-farm payrolls, which is going to be crucial data to look out for,” Standard Chartered analyst Dan Smith said.
“The relatively poor ADP March payrolls data on Wednesday could suggest that there is some downside risk… however the correlation with the nonfarm payrolls is not that strong and we can still see good data today.”
An improving growth trend in the United States has been a key driver for investors taking on more risk this year, but weaker-than-expected data this week on manufacturing activity and private sector hiring has suggested the momentum might be flagging.
The U.S. non-farm payrolls data, due at 1230 GMT, is still expected to show employers added 200,000 jobs last month. The numbers are being closely watched for clues on the strength of the U.S. economic recovery and the next step in the Federal Reserve’s monetary policy.
“The threat for gold is that a strong print would give enough ammunition to the market for another push lower and test the closely watched $1,525 support level,” UBS said in a note.