September 4, 2015 / 4:06 AM / 2 years ago

PRECIOUS-Gold steadies ahead of U.S. jobs data

* Traders await US nonfarm payrolls at 1230 GMT
    * Gold pricing in diminished odds of Sept. rate hike-
analyst

 (Adds India discounts, updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Sept 4 (Reuters) - Gold held declines from a
two-day losing streak on Friday, ahead of a crucial U.S. jobs
report as traders waited for clues about the timing of a Federal
Reserve rate hike. 
    Spot gold was little changed at $1,124.96 an ounce by
0640 GMT, after losing over 1 percent in the last two sessions.
The metal, which fell to a one-week low of $1,121.35 on
Thursday, was on track for a second straight weekly decline.
    Traders are watching the U.S. nonfarm payrolls report due
later in the day to gauge whether the Fed would begin increasing
rates at its policy meet this month. 
    Expectations of a September rate hike have been lowered
recently due to the volatility in global markets, although the
uncertainty around the timing of an eventual rate hike has taken
a toll on bullion. 
    "Gold is already pricing in diminished odds of a September
rate hike," said Howie Lee, an analyst at Phillip Futures. 
    "A strong labour market report will increase the odds of a
rate raise in two weeks time, sending the dollar up and gold
prices down. A weak report will dampen what are already very low
odds of a rate raise and send gold prices up," said Lee.    
    Economists polled by Reuters expect the U.S. economy to have
produced 220,000 new nonfarm jobs last month. 
    According to Fed policymakers and other economists,
employment and wage growth for August would likely need to be
particularly strong for the Fed to act this month, while the
sharp recent gyrations in stocks, bonds and currencies would
need to dissipate. 
    Other data on the labour market this week, including weekly
jobless claims on Thursday, has been encouraging.
 
    The data along with weakness in the euro pushed the dollar
index to its highest in over two weeks at 96.616 on
Thursday. 
    Higher rates would hurt non-interest-paying bullion and
boost the dollar.
    Also weighing on gold was the absence of Chinese buyers with
markets in the major gold consumer closed through Friday for
public holidays.
    Other data also showed weakness in physical demand. Sales of
gold coins and minted bars at the Perth Mint dipped in August
from a nine-month high in the previous month. 
    Gold prices in India swung to a discount to the global
benchmark this week for the first time since mid July as a weak
monsoon dampened demand in the world's second-biggest consumer.
 
    
    PRICES AT 0640 GMT
 Metal             Last      Change  Pct
                                     chg
                                           
 Spot gold          1124.96    0.11    0.01
 Spot silver          14.78    0.01    0.07
 Spot platinum         1002       1     0.1
 Spot palladium       574.5     1.5    0.26
 Comex gold          1124.6     0.1    0.01
 Comex silver        14.775   0.068    0.46
 Euro                1.1127                
 DXY                 96.314                
                                           
 COMEX gold and silver contracts show the
 most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford and
Anand Basu)

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