Gold futures eased slightly in electronic trade Thursday after closing fractionally higher the previous day, but with action muted ahead of key events in Europe and the U.S.
Gold for August delivery slipped $2.10, or 0.2%, to $1,396.40 an ounce during Asia trading hours, remaining below the $1,400 handle after briefly breaking back through that level Wednesday.
Wednesday’s regular session on the Comex division of the New York Mercantile Exchange saw sharp midday gains, with the August contract rising by as much as $13, as stocks sold off following weak U.S. private-employment data from ADP. But it soon pared those gains to settle just 0.1% higher.
Yet just as in the regular Comex session, caution remained the watchword on Thursday ahead of event risks in the form of a European Central Bank policy decision later in the day, and the U.S. nonfarm payrolls report on Friday.
While economists said the ECB was unlikely to lower its benchmark interest rate from its current historic low, comments by the central bank’s President Mario Draghi were likely to be the focus of attention.
In particular, some gold-market participants will want to see if Draghi brings up the possibility of setting the ECB’s deposit rate in negative territory to push banks to lend.
“If the ECB talks down the negative-deposit-rate idea, gold could fall back down,” Lido Isle Advisors president Jason Rotman said Wednesday.
Likewise, Friday’s U.S. May jobs report will be assessed for its likely effect on the Federal Reserve’s current bond-buying program.
Concerns about physical demand also weighed on gold Thursday, according to a report from bullion dealer Sharps Pixley quoted by Dow Jones Newswires.
Physical demand for gold has slowed in Asia, particularly in India after its government widened curbs on gold imports from banks to nominated agencies and trading houses, the report said.
In other metals action, July silver futures tracked gold lower, slipping 8 cents, or 0.4%, to $22.39 an ounce.
Copper for July edged off its two-week-high close Wednesday on the Comex to fall a penny, or 0.3%, to $3.36 a pound.
July platinum shed $4.70, or 0.3%, to $1,506.90 an ounce, while September futures for sister metal palladium eased 65 cents, or 0.1%, lower to $755.80 an ounce.