Investing.com - Gold prices edged mildly higher on Tuesday, but held below the key $1,200-level as investors looked ahead to Friday’s U.S. nonfarm payrolls report for April, for fresh indications on the strength of the economy and the timing of a U.S. rate increase.
A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could boost gold by undermining the argument for an early rate hike.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery tacked on 60 cents, or 0.05%, to trade at $1,187.40 a troy ounce during European morning hours. Prices traded in a tight range between $1,185.00 and $1,189.30.
A day earlier, gold rose $12.30, or 1.05%, to close at $1,186.80. Futures were likely to find support at $1,168.40, the low from May 1, and resistance at $1,207.40, the high from April 30.
Also on the Comex, silver futures for July delivery shed 3.8 cents, or 0.23%, to trade at $16.40 a troy ounce. On Monday, futures jumped 30.6 cents, or 1.9%, to end at $16.44.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% to trade at 95.83 early Tuesday.
The dollar regained ground amid signals that the U.S. economy may be stabilizing after a recent bout of weakness.
A recent run of disappointing U.S. economic data dampened optimism over the recovery, fuelling speculation the Fed could delay hiking interest rates until late 2015, instead of tightening midyear.
But the Fed said in its rate statement last week that recent indications of a slowdown in growth were probably due to “transitory factors.”
Elsewhere in metals trading, copper for July delivery inched down 0.8 cents, or 0.26%, to trade at $2.913 a pound. Prices slumped 0.9 cents, or 0.38%, on Monday to settle at $2.920.
Data released Monday showed that Chinese manufacturing activity contracted at the fastest rate in a year in April, adding to concerns over a slowdown in the world’s second-largest economy.
Prices of the red metal remained supported as the dismal data reinforced expectations that policymakers in Beijing will have to introduce further stimulus measures to jumpstart the economy amid lackluster growth.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.