Gold slides lower as U.S. dollar recovers

Investing.com – Gold prices slid lower in European morning hours on Friday, pulling away from a two-month peak as the U.S. dollar regained some ground after the People’s Bank of China set a higher yuan guidance rate for the first time in nine days.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 0.71% at $1,099.90.

The February contract ended Thursday’s session 1.46% higher at $1,049.60 an ounce.

Futures were likely to find support at $1,081.60, the low of January 6 and resistance at $1,107.80, the high of November 4.

The dollar found support after the PBOC strengthened the yuan’s midpoint rate for the first time in nine days on Friday, fixing it at 6.5636 per dollar, compared with the previous fix of 6.5646.

However, China was expected to continue allowing the yuan to weaken in the longer term in a bid to help its exporters and remain competitive against its regional rivals.

In addition, China announced late on Thursday that it suspended its new stock market circuit breaker introduced only on Monday as the system failed to reduce market volatility.

Gold had strengthened broadly after Wednesday’s largest daily drop in the yuan midpoint rate since last August, when an unexpected almost 2% devaluation of the currency sparked a broad based selloff in markets.

Elsewhere, investors were now eyeing the release of key U.S. employment data due later in the day for further indications on the strength of the country’s job market.

On Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending January 1 decreased by 10,000 to 277,000 from the previous week’s total of 287,000, which was the highest since mid-July.

Analysts expected jobless claims to fall by 12,000 to 275,000 last week.

Elsewhere in metals trading, silver futures for March delivery dropped 2.08% to $14.035 a troy ounce, while copper futures for March delivery gained 0.72% to $2.038 a pound.

 

@investing.com – Gold slides lower as U.S. dollar recovers