LONDON (Reuters) - Gold prices fell in Europe on Friday and were on track for theirbiggest weekly loss in seven, as traders took to the sidelinesahead of key payrolls data later in the day, and as the euroweakened ahead of elections in France and Greece this weekend. The U.S. non-farm payrolls data at 1230 GMT, a closely-watchedbarometer of the wider economy, is expected to show the economyadded 170,000 jobs in April. If the data beats expectations, it will further erode the case forthe Federal Reserve to unleash another round of quantitative easingto stimulate the economy. That would likely hurt gold, as expectations for a fresh round ofQE, which would undermine the dollar and keep real interest ratesat rock-bottom levels, have been a major driver of higher goldprices this year.
Spot gold was down 0.5 percent at $1,629.36 an ounce at 0925 GMT,while U.S. gold futures for June delivery were down $4.80 an ounceat $1,630.10. Spot prices have fallen nearly 2 percent so far this week, theirbiggest weekly loss since mid-March. "Our economists expect NFP to show a modest gain of 125,000, versusa consensus of 160,000," BNP Paribas analyst Anne-Laure Tremblaysaid. "Such an outcome would probably be more positive for gold, asit would raise the possibility of further monetary accommodation bythe Fed before the end of the year." The euro fell 0.1 percent against the dollar, meanwhile, ahead ofelections in France and Greece on Sunday, the results of which maystir doubts about the countries' commitment to fiscal austerity.
In France, socialist front-runner Francois Hollande has promised toshift the debate in Europe towards promoting growth if he iselected. Greek voters angry with economic hardship are expected topunish traditional parties in an election that could plunge thecountry into new political chaos. A potentially tumultuous weekend for European politics pushedEurope's leading shares lower on Friday, while safe-haven Germanbunds were flat ahead of the jobs data. "An acceleration of the focus on Europe could potentially be verydisruptive for markets and derail investor sentiment yet again,"UBS said in a note on Friday.
"With gold still undecided as to whether it would rather sympathisewith risk or safe haven assets, the reaction function of XAU/USDremains unclear at this point," it added. "But given the pressurerenewed European tensions would have on the single currency, (goldin euro terms) might be poised to benefit." Euro-priced gold was down 0.3 percent at 1,240.11 euros an ounce,and is on track to fall 1 percent this week. SUPPORT HOLDS From a technical perspective, a breach of current support for spotprices around $1,628 an ounce could trigger a move back to$1,612-1,615 and from there towards $1,600, analysts who study pastprice moves for clues as to the future direction of trade said. If the metal stabilises at its current level, it would likelybounce back to $1,640 an ounce, however.
Among other precious metals, silver fell to a 3-1/2 month low at$29.75 and was on track to fall 4.5 percent on the week, havingslipped below $30 an ounce for the first time since mid-January. Itwas later down 0.7 percent at $29.84. If it closes the week in the red, it will have fallen for eight outof 10 weeks. The gold/silver ratio, which measures the number ofsilver ounces needed to buy an ounce of gold, rose to a 3-1/2 monthhigh of 54.6 on Friday.
"(The silver) market will remain in fundamental surplus through to2015," RBS said in a report. "Already we had net disposals in 2011of 806 tonnes, and a further 265 tonnes of outflows since earlyMarch this year." "We think the silver price has peaked and forecast silver toaverage $33 an ounce in 2012, down 6 percent year on year, and tocontinue declining through to a 2015 average of $21," it added. "Weexpect to see price volatility make silver a classic trading topand tailing market for the quick and nimble." Spot platinum was down 0.3 percent at $1,525.49 an ounce, whilespot palladium was down 0.8 percent at $651.83 an ounce. (Reportingby Jan Harvey; editing by Keiron Henderson) Thomson Reuters 2012 All rights reserved SUBSCRIBE to Mineweb.com's free daily newsletter now. I am Home Appliances writer, reports some information about stackable record player , kitchen ventilation hoods.
Related Articles -
stackable record player, kitchen ventilation hoods,
|
