Gold price goes up
Gold inched up on Thursday and was on track for its 10th consecutive quarterly rise since 2008 as an early drop spurred cautious bargain hunting ahead of U.S. February employment data at the end of the week.
U.S. private employers added more than 200,000 jobs in March, underscoring expectations that momentum in the labor market will help underpin the economic recovery as investors turned their attention to the non-farm payrolls data due at 1230 GMT (8:30 a.m. ET) on Friday.
Spot gold hit an intraday low of $1,420.25 an ounce before rebounding to $1,425.95 by 0549 GMT (1:49 a.m. ET), up $2.57 an ounce. Bullion had risen as high as $1,430 on Wednesday as resurgence of risk appetite spurred buying.
“I think sentiment is slightly bullish because there are still many uncertainties around. Even though the euro zone is expected to increase interest rates, it will only be a small increase,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
“I think we are waiting for tomorrow. Nobody really knows what to do,” said Leung, referring to the U.S. jobs report.
A Reuters poll shows a median forecast for employment, or non-farm payrolls, is expected to rise by about 190,000 jobs in March, with private payrolls forecast up 200,000.
Gold rallied to a lifetime high around $1,447 last week because of a falling dollar, violence in the Middle East and North Africa as well as renewed concerns about a sovereign debt crisis in Europe.
A Reuters survey showed on Wednesday that gold’s decade-long price rally, which took the metal to record highs last week, looks set to plateau in the second quarter as more downside risks emerge for bullion.
Holdings on the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, were unchanged at 1,211.836 tonnes but the ETF was heading for its biggest quarterly drop since its inception in 2004. The holdings hit a record at 1,320.436 tonnes on June 29.
U.S. gold futures for April rose $2.4 an ounce to $1,426.2 an ounce.
European Central Bank Executive Board member Lorenzo Bini Smaghi said on Thursday the central bank’s policy was to gradually raise interest rates, while another board member, Juergen Stark, said rates were exceptionally low, cementing expectations for an April interest rate hike.
The euro rose 0.1 percent to $1.4138, facing resistance at $1.422 and $1.4248. BNP Paribas is recommending long euro positions from $1.4120 to target $1.45 with a stop at$1.402.
In the physical market, consumers from Indonesia stayed on the sidelines, but purchases from Thailand and Indonesia kept premiums for gold bars steady at 90 cents to the spot London price in Singapore.
“I have to say there aren’t many transactions on my side. I think people are just waiting for the data tomorrow because there’s no clear direction,” said a dealer in Singapore.
“But I heard the demand from China is still good, and in fact, we are still getting inquiries from them,” said the dealer, referring to the world’s second-largest consumer after India.
The high-demand wedding season is underway in India, where jewelry is the most common gift during religious events and weddings.
Most Asian shares edged up on Thursday, heading for a quarterly gain despite a sharp sell-off earlier this month after disaster struck Japan, while the yen was poised for a quarterly loss on expectations Tokyo will have to maintain super-loose monetary policy far longer than Europe and the United States.