Gold was rangebound in early morning London trading while investors ready for the release of the blockbuster US jobs report this afternoon.
The spot gold price was last at $1,210.70/1,211.50 per ounce, up $3.40 or around 0.3 percent on Thursday’s close and confined to a narrow $6 intraday range.
Gold has stepped higher after the dollar edged back from nine-year highs against the euro at 1.1806 amid unconfirmed reports that the ECB is preparing a 500-billion-euro quantitative easing package.
If the speculation is confirmed, gold should benefit because of the emphasis on the factors that prompted the ECB to act and the provision of further liquidity, UBS’ Edel Tully said in a note.
“Weak economic data is expected to push the ECB into action; at the same time, it increases uncertainty and fuels investor nervousness. The latter attracts investors towards gold’s safe-haven properties and part of the recent strength above $1200 is clearly on the back of this,” she said.
“Subsequently, once asset purchases commence, the expansion of the ECB’s balance sheet itself should also be supportive for gold from a liquidity perspective and over the longer-term as inflation expectations eventually pick up,” she added.
But the main focus remains the US non-farm employment change data due later today, forecast at 241,000 after the strong previous reading of 321,000. Another positive reading will add to the prospects of near-term interest-rate rises and boost the dollar, which would weigh on gold.
“The market is looking for a figure in the region of 240,000 after last month’s 321,000 increase. This was a big figure, so keep an eye out for any revisions,” Marex Spectron’s David Govett said.
“A good figure will probably see the market test $1,200 support and conversely a bad figure may well see the resistance at $1,225 looked at again. Anything in the region of the expectation will more than likely see little happen and we will continue to range trade,” he added.
In other data today, the Chinese CPI at 1.5 percent was in line with expectations, although the PPI at -3.3 percent was short of forecast.
The German trade balance fell short at 17.7 billion euros as did industrial production at -0.1 percent. The French trade balance at -3.2 billion euros was better than expected although industrial production disappointed at -0.3 percent.
The US monthly unemployment rate, average hourly earnings figures and wholesale inventories are also due.
In the other metals, silver at $16.24/16.29 per ounce was down seven cents, platinum gained $5 to $1,219/1,224 and palladium was $6 higher at $791/796.