Gold Holds up on Safe-haven Bids, Cautious Stocks
February 6, 2014 6:05 PM EST
Gold held steady on Thursday as global equities remained volatile amid lower risk appetite and concerns over economic growth, and as investors waited for cues from U.S. jobs data.
An employee shows gold bangles to a customer at a jewellery showroom in Mumbaim in November, 2013 (Reuters).
A mixed bag of U.S. data added to pressure from the emerging markets turmoil on equity markets, underpinning safe-haven assets such as gold and the yen.
"Even when stocks have rallied over the past few trading sessions, we have noticed that gold has not really dropped that much, telling us that investors in the precious metals space may well believe that there is more turbulence ahead," said Edward Meir, an analyst at INTL FCStone.
"In addition, we have to suspect that a wave of currency declines sweeping a number of emerging market economies, ranging from Argentina to Ukraine, must be prompting some of the local population to move their savings away from depreciating currencies and into hard assets like gold."
Spot gold had eased 0.2 percent to $1,255.24 an ounce by 0323 GMT. Gold rose nearly $20 an ounce on Wednesday after a weak U.S. jobs report but pared most of the gains on other strong numbers.
Data on Wednesday showed that U.S. private employers added 175,000 jobs in January, the smallest gain since August, according to payrolls processor ADP, while growth in the service sector picked up last month.
Investors are now eyeing the Friday release of U.S. nonfarm payrolls data, a key gauge of the labour market, as any setback in economic growth could prompt the Federal Reserve to slow the pace of its stimulus tapering.
In the physical markets, traders were waiting for the return of Chinese market on Friday, after a week-long holiday for the Lunar New Year.
Platinum was trading flat as government-brokered talks between mine union AMCU and the world's three biggest platinum producers to end a two week wage strike in South Africa have adjourned to allow for individual consultations.
Silver was also steady, holding on to overnight gains from the biggest one-day jump in nearly four weeks.