Gold posts mild gains, ending 3-day skid ahead of key April jobs report

Category: Commodities

Investing.com -- Gold futures inched higher on Thursday, halting a brief three-day losing streak amid a resurgent dollar, as investors awaited a key U.S. monthly jobs report at week's end for clearer indications on the strength of the world's largest economy.On the Comex division of the New York Mercantile Exchange, gold for June delivery traded in a broad range between $1,275.50 and $1,288.25 an ounce before settling at $1,278.25, up 3.85 or 0.30% on the session. Gold remains less than 2% below from 15-month highs earlier this week when it surged above the $1,300 level. The precious metal is up by approximately 20% since the start of the year and is on pace for one of its strongest first halves in decades.Gold likely gained support at $1,063.20, the low from January 4 and was met with resistance at $1,322.10, the high from August 8, 2014.On Thursday morning, the U.S. Department of Labor said initial jobless claims increased by 17,000 to 274,000 last week, slightly above consensus estimates of 262,000. The amount represented the largest one-week spike in 16 months. Still, the 4-week Moving Average increased by only 2,000 to 258,000, remaining below the same measure a month ago. It came one day after the ADP Research Institute said private payrolls rose by 156,000 in April, sharply below consensus estimates of 193,000. Over the first three months of the year, the labor market has added an average of 202,000 private jobs per month.When the Bureau of Labor Statistics (BLS) releases its April jobs report on Friday morning, analysts expect an increase of 200,000 in nonfarm payrolls following gains of 215,000 a month earlier. Economists are also anticipating a slight dip in the unemployment rate by 0.1% to 4.9%. The rate has lingered near multi-year lows over the last several months. More critically, analysts will keep a close eye on average hourly wages which are expected to tick up by 0.3%, mirroring a considerable 0.3% uptick in March. Even as the U.S. economy has emerged from a prolonged recession, wages have remained stubbornly low since the Financial Crisis.After holding short-term interest rates steady last month, the Federal Reserve has indicated that it will take a data driven approach with the timing of its next rate hike. 

The Federal Open Market Committee (FOMC) has left its benchmark Federal Funds Rate at its current level between 0.25 and 0.50% in each of its three meetings this year. Any rate hikes by the Fed this year are viewed as bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments.The FOMC's next meeting in June will come days before a controversial referendum in the U.K. on its status in the European Union. A vote paving the way for a so-called "Brexit," could have broad implications on global financial and foreign exchange markets.The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.55% to an intraday high of 93.86. Despite the gains, the index is still down by more than 6% since early-December. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.Silver for May delivery gained 0.109 or 0.63% to $17.410 an ounce.Copper for May delivery fell by 0.034 or 1.53% to $2.153 a pound.