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Gold dips as firm equities weigh, investors await U.S. jobs data

Published 2019-07-04, 03:46 a/m
© Reuters.  Gold dips as firm equities weigh, investors await U.S. jobs data
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* Gold to retest resistance at $1,435/oz - technicals

* Traders expect U.S. Fed to cut rates at end-July

By Harshith Aranya and Eileen Soreng

July 4 (Reuters) - Gold prices edged lower on Thursday due to an uptick in the stock markets, while investors sought direction from upcoming U.S. non-farm payrolls data for more cues on Federal Reserve's stance on rate cuts.

Spot gold XAU= was 0.3% lower at $1,414.07 per ounce, as of 0731 GMT.

U.S. gold futures GCv1 were down 0.3% to $1,416.9 an ounce.

There's more interest in riskier assets, said Hareesh V, head of commodity research at Geojit Financial Services, adding that gold is seeing a technical correction though the broader outlook is positive.

Gold was on track to mark its seventh week of gains, mainly driven by global growth concerns and a dovish outlook from major central banks.

This is a market that expects interest rate cuts, mainly in line with expectations the European Central Bank's next chief would stay dovish, said Helen Lau, analyst, Argonaut Securities.

"Also the U.S. 10-year yield has dropped so low that it makes gold more appealing."

European Union leaders' nomination of IMF Chief Christine Lagarde as Mario Draghi's replacement at the helm of the European Central Bank reinforced expectations of monetary policy easing in the bloc. U.S. President Donald Trump nominated Christopher Waller and Judy Shelton to the U.S. Federal Reserve Board - both candidates are seen as dovish in their policy stance.

Falling Treasury yields and expectations of the Fed cutting interest rates at its July 30-31 meeting weighed on the dollar, while Asian stocks advanced tracking sharp gains on the Wall Street. USD/ MKTS/GLOB US/N

Markets were expected to see subdued trading due to a U.S. public holiday, analysts said.

Investors' next focus is on Friday's U.S. non-farm payrolls for June, which economists expect to have risen by 160,000 in June, compared with 75,000 in May. up for the gold rally is the U.S. employment report, nothing short of an incredible number of jobs and wages over the forecast will be enough to dampen the Fed interest rate cut narrative that is keeping the yellow metal on the rise," Alfonso Esparza, a senior market analyst at OANDA, said in a note.

A report by a payrolls processor ADP (NASDAQ:ADP) showed U.S. companies added jobs in June, but fewer than what analysts had forecast, raising concerns the labour market is softening. the technical front, spot gold may retest a resistance at $1,435 per ounce, leading to gains in the $1,443-$1,456 range, according to Reuters technical analyst Wang Tao. XAG= were down 0.4% at $15.24 per ounce, and platinum XPT= fell 0.2% to $834.50 per ounce.

Palladium XPD= dipped 0.6% to $1,561.55 per ounce. The metal touched an over three-month peak of $1,574 on Wednesday.

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