Gold Little Changed Near 11-Wk Low Before U.S. Jobs Data

Gold traded little changed after reaching an 11-week low in New York as a stronger dollar cut demand and investors awaited U.S. jobs data that may back the case for the Federal Reserve to increase borrowing costs.

The dollar advanced to a 13-month high against 10 major currencies before data due today that may show U.S. payrolls climbed by more than 200,000 in August for a seventh straight month. The greenback gained yesterday, partly as the European Central Bank unexpectedly cut its main refinancing rate to a record and signaled purchases of asset-backed securities.

Bullion slipped 1.6 percent this week on the outlook for higher U.S. interest rates, while Ukraine’s President Petro Poroshenko voiced “careful optimism” that talks today with pro-Russian rebels will set the course for a cease-fire as the European Union moves toward imposing more sanctions on Russia. Gold’s drop took it toward a technical level that signals to some traders that prices may be poised to rise.

“We do not expect gold to gain much ahead of the release of the U.S. monthly employment report,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report today. “Most of the data that have been coming out from the U.S. of late have been rather impressive” and a positive jobs number may further strengthen the dollar and hurt gold, he said.

Gold for December delivery was little changed at $1,266.20 an ounce by 7:30 a.m. on the Comex in New York. It reached $1,258 today, the lowest since June 17. Bullion for immediate delivery added 0.3 percent to $1,265.62 in London, according to Bloomberg generic pricing.

Trading Volume

Futures trading volume was 28 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg show. The 14-day relative-strength index declined this week toward the level of 30 that suggests to some investors that prices may gain.

There’s a 46 percent chance the Fed will raise its benchmark interest-rate target to at least 0.5 percent by June 2015, according to futures data compiled by Bloomberg. The Labor Department will release jobs data at 8:30 a.m. Washington time.

Holdings in gold-backed exchange-traded products fell 4.7 metric tons to 1,713.3 tons yesterday, the lowest since June 27, data compiled by Bloomberg show.

Silver for December delivery was little changed at $19.14 an ounce in New York, after reaching $19.02, the lowest since June 10. Platinum for October delivery was also little changed at $1,408 an ounce, after touching a four-month low of $1,403.50.

Palladium for December delivery lost 0.3 percent to $887.95 an ounce. Prices reached a 13-year high of $913 this week amid concern that supplies from Russia, the largest producer, may be disrupted.

In Brussels today, representatives of EU governments will consider tightening the economic sanctions that were imposed on Russia in July. While Russia retaliated against previous sanctions by banning imports of some food products, there have been no metal related sanctions yet.

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