Gold recovered from two-week lows on Thursday as the dollar lost ground to the euro, but uncertainty ahead of Friday's US nonfarm payroll figures held prices in a narrow range. The data is being watched for clues on whether the Federal Reserve will raise interest rates this year. Expectations for a strong report rose after an upbeat reading of US private employment on Wednesday, pressuring gold. The metal later rebounded, however, as data showing the pace of growth in the US manufacturing sector slowed in September pushed the dollar lower versus the euro.
Spot gold was up 0.2 percent at $1,117.11 an ounce at 1425 GMT, after dropping to $1,110.75, its lowest since September 16. US gold futures for December delivery were up $1.30 an ounce at $1,116.50. "All eyes are on the upcoming US NFP data and this will set the tone for trading," Naeem Aslam, chief market analyst at Ava Trade, said. "The ISM manufacturing data has ... added a negative tone for the Fed rate hike decision but the ultimate test will be tomorrow, and if we have a strong reading it could push the gold price lower."
The Fed has tied its schedule for raising rates to the strength of US data, particularly jobs. Expectations the Fed is set to raise rates this year for the first time in nearly a decade have pressured gold, as it would potentially lift the opportunity cost of holding non-yielding bullion while boosting the dollar. Charts were not looking good for gold either.
"Gold (completed) its fourth consecutive down day. Lower lows and lower highs over those days make for a short-term bearish trend," technical analysts at ScotiaMocatta wrote. "We will run into technical support at $1,100 from September 11. Moving-average resistance now comes in near $1,130." Platinum was up 1 percent at $913, while palladium outperformed to climb 4.1 percent to $676.97 an ounce. Its rally accelerated when the metal broke through its previous high for the week at $669 an ounce.
Platinum and palladium are chiefly used in autocatalysts. Ford Motor said on Thursday its US sales rose 23 percent in September, while General Motors said its total sales rose 12 percent in the same month. Silver was up 1 percent at $14.64 an ounce. The global silver coin market is in the grips of an unprecedented supply squeeze, forcing some mints to ration sales and step up overtime while sending US buyers racing abroad to fulfil a sudden surge in demand.