Gold bounces off six-week low, NFP eyed
Last week, gold retreated from a peak of $1214.97 an ounce after the release of some optimistic U.S. data, which eased concerns after a string of weak economic reports.
U.S. initial jobless claims dropped to 262,000 in the week through April 25, the lowest in 15 years, compared to 290,000 the previous week.
The world’s biggest economy grew a meagre 0.2 percent in the first quarter, but the Fed said the slowdown was due to transitory factors.
Investors will put Friday’s U.S. nonfarm payrolls data under scrutiny to, noting that strong data may prompt the Fed to raise its borrowing cost earlier than anticipated.
American employers added 231,000 jobs in April from 126,000 in March, according to analysts’ forecasts.
As of 12:00 GMT, gold traded around $1182.47 after hitting a high of $1185, amid calm trading on the back of public holidays in some of Asian countries.
Gold lost 2.77 percent over the course of the last three weeks, where it posted its fourth weekly decline last week and its third straight monthly drop in April.
Still, investors prefer to invest their money in stocks and other assets paying interest on expectations the Fed would eventually ends the near-zero interest rate era.
The dollar index, which measures the greenback’s movements versus a basket of major currencies, rebounded for a second day on Monday to trade around 95.63.
Recently, the inverse relation has weakened, as both dollar and gold move in the same downside direction.
For this week, the XAU/USD is predicted to move between support and resistance at $1160 and $1205 respectively.