Gold dipped slightly in Europe on Friday afternoon, with the market in a narrow solid band despite sharp currency reaction to a key report on the US labour market. The dollar dropped to within a hair's breadth of record lows against the euro after the US payrolls report for November was unexpectedly weak.
Dealers said gold was stuck in consolidation mode after falling sharply on Thursday from its highest since June 1988 at $456.75 per ounce.
Spot gold was at $448.15/448.90 per troy ounce by 1515 GMT, compared with $449.70/450.40 late in New York on Thursday.
"My guess is that gold will continue to consolidate within a $446-$457 range and that could well last for the next couple of days," a European trader said.
US November non-farm payrolls rose by 112,000, below economists' forecasts for a 180,000 rise. The jobless rate was 5.4 percent, matching forecasts.
The softer than expected report hurt the dollar - making dollar-denominated gold more attractive for non-US investors - because it cast some doubts on the pace of the US economic recovery and Federal Reserve monetary tightening, analysts said.
The euro was at $1.3352 after peaking for the day earlier at $1.3381.
Dealers said gold could be well positioned to head higher, continuing an impressive run of gains since September, although end-year position squaring could rein in progress.
"I don't expect a much deeper correction since a majority of people still expect a lower dollar, but book squaring towards year-end can't be ruled out," the trader said, implying some speculators bailing out of long positions.
James Moore of TheBullionDesk.com said gold should find good scaled-down buying, primarily from physical sources but also from investors keen to enter the market.
"Support should be seen at $445 but I think we could see gold dip as low as $438-40 as we start to see early year-end book squaring," he said in a report.
Silver was also trading in tight ranges after dropping heavily from an eight-month high of $8.15 in the previous session.
Spot silver was last at $7.80/7.83 compared with $7.87/7.90 late on Thursday in New York, with dealers expecting the market to take further direction from gold's moves.
Platinum slipped back to $868.00/872.00 from $878.00/883.00 previously, while palladium also eased to $205.00/210.00 from $206.50/212.50.
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