Spot gold steady on Friday eyes U.S. jobs data

Spot gold was steady on Friday, after the euphoria around a coordinated effort to inject liquidity by central banks faded, as investors await a U.S. employment report for clues on the health of the world’s biggest economy.

The U.S. non-farm payrolls data is expected to show a pickup in hiring in November, which could add to expectations of stronger growth in the world’s largest economy, just as manufacturing data in the euro zone and much of Asia contracted in November, pointing to a global slowdown.

News from Europe will continue to dominate the sentiment. Markets rallied earlier in the week after the world’s major central banks joined force to boost liquidity, but the momentum quickly faded as investors realised that it could not solve Europe’s debt problems.

“The central banks’ move reinforced the perception that liquidity crunch is a big problem,” said Hou Xinqiang, an analyst at Jinrui Futures, adding that gold’s property as a safe haven has been overlooked in recent months and the gloom hanging over the global economy is likely to suppress gold’s sentiment.

“Liquidity is the focus of the market. Gold’s appeal as safe haven may return only when liquidity improves and market sentiment warms up.”

Spot gold edged down 0.1 percent to $1,741.84 an ounce by 0307 GMT, but set to rise 3.8 percent from a week earlier, its biggest weekly gain in a month.

U.S. gold inched up 0.4 percent to $1,746.30.

Technical analysis suggested spot gold could drop to $1,722 during the day, said Reuters market analyst Wang Tao.

Investors will closely watch the European Council summit next week. The new head of the European Central Bank signalled that it stood ready to act more aggressively to fight the debt crisis if policymakers agree on much tighter budget controls in the euro zone.

Supporting the sentiment in gold, South Korea’s central bank bought 15 tonnes of gold in November, following purchases of 25 tonnes in June and July, as central banks around the world, especially in emerging economies, have aggressively bought bullion over the past few months.

“It’s not a surprise, as gold seems to be the only thing central banks can buy to diversify their reserves as economic problems seem to spread around the world,” said Ronald Leung, a physical dealer at Lee Cheong Gold Dealers.

Norilsk Nickel (GMKN.MM) expects autocatalyst metal palladium to be in a deficit in 2012 due to sharply lower Russian supplies, the world’s biggest palladium producer’s marketing chief said on Thursday.

Spot palladium inched up 0.1 percent to $626.13, on course for its biggest weekly gain in a year with a 12 percent rise. – Reuters

Tags: Gold analysis, Gold future prices, Gold futures, Gold investment, Gold news, Gold price, gold price forecast, Gold prices, price of gold, Spot gold, Spot gold price

Posted by admin on Dec 2 2011. Filed under Gold price. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry