Gold slid for a third straight session on Friday as equities and the dollar firmed after sharp losses, while traders awaited US non-farm payrolls data to gauge the strength of the economy and its impact on the Federal Reserve’s interest rate policy.
Spot gold eased 0.1 per cent to $1,182.88 an ounce by 0046 GMT, after losing 0.6 per cent in the previous session. So far this week, gold is up 0.4 per cent.
The non-farm payrolls report is closely watched as it provides a good reading of the health of the economy. That could in turn provide clues as to when the US central bank would begin to hike rates from record lows.
Strong data could prompt the Fed to raise the rates soon, a move that would hurt the demand for non-interest-paying bullion. Gold prices could take a further hit from a strong report.
Analysts polled by Reuters expect non-farm payrolls to increase by 224,000 in April after the meagre 126,000 increase in the prior month.
Unemployment benefit claims
The possibility of a strong jobs report was also reinforced by Thursday’s data on weekly claims for unemployment benefits, which held near a 15-year low last week in a sign that the labour market was strengthening.
The dollar got a boost from the strong data, hurting gold’s safe-haven appeal. Also hurting the precious metal was the stability in bond and equity markets on Thursday, following a sharp sell-off.
SPDR Gold Trust
Reflecting investor anxiety, data showed holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.36 per cent to 739.07 tonnes on Thursday.
In other industry news, lower prices and a stronger dollar helped lift US imports of gold, silver and platinum jewellery by as much as 15 per cent in the first quarter of 2015, according to Thomson Reuters GFMS calculations released on Thursday.
Platinum producer Lonmin is in talks with unions and employees to cut 3,500 jobs at its mines in South Africa, it had said on Thursday, highlighting the pressure of low prices on the industry.