December 4, 2015

Gold Holds Above 2010 Lows Ahead of U.S. Jobs Data

(Reuters) - Gold clung to overnight gains on Friday and looked set to snap a six-week losing streak as a slump in the dollar buoyed the metal above 2010 lows ahead of the key U.S. non-farm payrolls data later in the session.

The metal rallied nearly 1 percent overnight after the European Central Bank's monetary easing measures fell short of expectations, boosting the euro and sending the dollar to its lowest in a month.

Spot gold was steady at $1,062.40 an ounce by 0348 GMT and was headed for a 0.3 percent gain for the week.

Investors stuck to the sidelines with the focus now on the U.S. jobs report later on Friday to gauge the strength of the economy and how it would impact the Federal Reserve's monetary policy.

"A robust U.S. payrolls release could push gold back on the defensive," HSBC said in a note.

Gold had fallen to a near-six-year low of $1,045.85 early on Thursday on fears of a looming U.S. rate hike.

The Fed is widely expected to hike rates at the Dec. 15-16 policy meeting for the first time in nearly a decade. Higher rates tend to weigh on non-interest-paying gold.

Investors have been positioning for such a move by pulling out of bullion funds. Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund, are at their lowest since September 2008.

Fed Chair Janet Yellen, speaking before Congress' Joint Economic Committee on Thursday, said the United States may be "close to the point at which we should be raising" rates.

Yellen also said the U.S. economy needs to add fewer than 100,000 jobs a month to cover new entrants to the workforce, perhaps setting an implicit floor for jobs growth that policymakers want to see.

In contrast, analysts expect the November payrolls report on Friday to show 200,000 jobs were added last month.

A strong report could cement the case for a rate hike in December, boosting the dollar and hurting gold.

"Further dollar short-term weakness will support the precious complex. Support levels for gold are in the mid 1,040's and immediate resistance in the high 1,060's," said MKS Group trader James Gardiner.