Gold Drops As US NFP Looms

Gold was little changed near a six-week low in London, set for a third weekly loss, before a U.S. jobs report that may show the economy is strengthening.

A report may show today U.S. employers added more than 200,000 jobs for a sixth month after data showed yesterday a four-week average of jobless claims sank to an eight-year low. Bullion slipped 3.4 percent in July in the biggest monthly drop this year as the dollar gained the most since May 2013 against a basket of 10 major currencies.

Gold slid 28 percent last year on expectations an improving economy would warrant less debt purchases and higher interest rates. The Federal Reserve said this week it will trim bond buying for a sixth time. The metal fell a fourth day yesterday, even as global equities tumbled amid disappointing corporate earnings and concern about an Argentinian default.

After yesterday’s data, “the thought seemed to be that the U.S. economy is still on the right track,” David Govett, head of precious metals at Marex Spectron Group in London, said in a report today. “There was some physical demand around, although nothing overly exciting. This morning will be all about waiting for the employment numbers. If it is a good figure, then the precious complex will see another bout of selling.”

Gold for immediate delivery added 0.2 percent to $1,284.91 an ounce by 9:17 a.m. in London, according to Bloomberg generic pricing. It reached $1,279.30, the lowest since June 19, and is down 1.7 percent this week. Gold for December delivery rose 0.2 percent to $1,285.60 on the Comex in New York.

Futures trading volume was 31 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg show.

via Bloomberg

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