Gold Declines Before U.S. Jobs Data as Euro Drops on ECB Pledge

Gold fell as investors wait for U.S. jobs data that may provide clues to the Federal Reserve’s plans to taper stimulus and the euro slid after the European Central Bank pledged to keep interest rates low for an extended period.

U.S. nonfarm payrolls increased by 165,000 jobs last month, from 175,000 in May, according to the median estimate of economists surveyed by Bloomberg. The euro dropped to a five-week low against the dollar after ECB President Mario Draghi said the monetary policy stance will remain accommodative to spur growth. Gold often moves inversely to the greenback.

“The labor market is the key focus of the Fed’s decision-making process with regard to tapering its monthly asset purchases,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report.

Gold for immediate delivery fell 0.3 percent to $1,249.31 an ounce at 2:36 p.m. New York time. Prices, which rose 0.8 percent yesterday, slumped to $1,180.50 on June 28, the lowest since August 2010.

Gold futures for August delivery slid 0.2 percent to $1,249.50 in electronic trading on the Comex in New York. The exchange floor was closed today for the Independence Day holiday.

Trading Volumes

Futures trading was 74 percent lower than the average for the past 100 days for this time, according to data compiled by Bloomberg. Bullion declined 23 percent in the second quarter as Fed Chairman Ben S. Bernanke said that the central bank may slow its asset purchases this year if the economy continues to improve.

Gold holdings in exchange-traded products dropped 0.3 percent yesterday to 2,036.89 metric tons, the lowest since May 2010.

“ETFs continue to see reduction, and until this changes, the upside seems limited,” said Ole Hansen, the head of commodity strategy at Saxo Bank A/S in Copenhagen.

Silver for immediate delivery fell 1.1 percent to $19.5575 an ounce. Platinum declined 0.4 percent to $1,338.70 an ounce, and palladium dropped 1.1 percent to $677.25 an ounce.

Before it's here, it's on the Bloomberg Terminal.