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PRECIOUS-Gold eases before U.S. jobs data and as equities gain

Published 2019-07-04, 10:04 a/m
© Reuters.  PRECIOUS-Gold eases before U.S. jobs data and as equities gain
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(Updates prices)

* Gold may retest resistance at $1,435/oz - technicals

* Palladium off over 3-month peak hit on Wednesday

By Sethuraman N R

July 4 (Reuters) - Gold prices eased on Thursday as investors locked in profits before this week's U.S. non-farm payrolls data and as a rally in stock markets briefly halted the metal's recent strong run.

Spot gold XAU= was 0.3% lower at $1,414.21 an ounce by 09:43 a.m. EDT (1343 GMT). U.S. gold futures GCv1 were down 0.2% at $1,417.40 an ounce.

"Investors are already very long on gold, but it has still not pushed to new highs," said ABN AMRO (AS:ABNd) analyst Georgette Boele, adding the news flow was not enough to drive follow-up buying.

"We have very big longs and they really need to have very positive news to push prices higher," she said.

With Wall Street closed for the Independence Day holiday, the gold market was less liquid and investors were focussed on Friday's U.S. non-farm payrolls for indications on rate cuts from the U.S. Federal Reserve's July meeting, analysts said.

Economists expect non-farm payrolls to have risen by 160,000 in June compared with 75,000 in May. bonds were near multi-year lows on bets the U.S. Federal Reserve would cut interest rates this month and that other major central banks would embrace looser monetary policy, pushing world stocks to new 18-month highs. MKTS/GLOB

U.S. stocks rose on Wednesday, with each of the major indexes closing at a record high. .N

"U.S. stock markets are probably part of the reason why gold is not picking up pace again immediately," Commerzbank (DE:CBKG) analysts said in a note.

Bullion hit a six-year high last week at $1,438.63 an ounce, driven by a dovish outlook from major central banks and an escalation of tensions between the United States and Iran.

Expectations of a dovish approach to monetary policy globally, have driven inflows into gold. Lower interest rates tend to make non-yielding gold more attractive to investors.

"We continue to see central banks cutting rates later this year, which means that the rally in gold will continue," said Xiao Fu, head of commodity markets strategy at Bank of China International Global Commodities (UK).

"The equity markets are quite stretched and heading into bubble-like territory," she said, adding gold could offer better value at current prices than equities.

On the technical front, spot gold may retest a resistance at $1,435 an ounce, leading to gains in the $1,443-$1,456 range, according to Reuters technical analyst Wang Tao. XAG= was down 0.2% at $15.26 per ounce, and platinum XPT= was steady at $836.55 per ounce.

Palladium XPD= dipped 0.7% to $1,560 per ounce. The metal rose to its highest level in over three-months of $1,574 on Wednesday.

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