Investing.com - Gold prices held near the prior session’s 28-month high in European trade on Thursday, as market players looked ahead to key U.S. employment data for more clues on the Federal Reserve’s next move.
The U.S. was to release the ADP jobs report for June at 12:15GMT, or 8:15AM ET, followed by weekly jobless claims data at 12:30GMT, or 8:30AM ET.
Market players are also focusing on Friday's U.S. nonfarm payrolls report. The consensus forecast is that the data will show jobs growth of 175,000 last month, following an increase of just 38,000 in May, the unemployment rate is forecast to inch up to 4.8% from 4.7%, while average hourly earnings are expected to rise 0.2% after gaining 0.2% a month earlier.
An upbeat employment report will point to an improving economy and support the case for higher interest rates in the coming months, while a weak report would add to uncertainty over the economic outlook and push prospects of tighter monetary policy further off the table.
Market players all but ruled out further rate hikes by the Fed this year in the aftermath of Britain’s vote to leave the European Union. In fact, futures markets are now reflecting a chance that the Fed could actually cut interest rates before the end of the year.
According to the CME Fed Watch tool, there’s currently a 0% probability of a Fed rate hike in July and a 5% probability of a rate cut.
Federal Reserve policymakers decided in June that interest rate hikes should stay on hold until they have a handle on the consequences of Britain's vote on EU membership, according to the minutes of the Fed's June policy meeting released on Wednesday.
Gold for August delivery on the Comex division of the New York Mercantile Exchange inched up 70 cents, or 0.05% to trade at $1,367.80 a troy ounce by 06:50GMT, or 2:50AM ET.
A day earlier, prices surged to $1,377.50, a level not seen since March 2014, as uncertainty surrounding global growth in wake of Britain’s vote to exit the EU sent investors flooding into safe haven assets.
Gold has been well-supported in recent weeks amid fading expectations of a Federal Reserve rate hike in the next couple of months and as expectations mounted that central banks around the world will step up monetary stimulus to counteract the negative economic shock from the Brexit vote.
The yellow metal rose almost 9% in June, its biggest monthly increase since February. Prices are up nearly 29% so far this year.
Also on the Comex, silver futures for September delivery shed 14.1 cents, or 0.7%, to trade at $20.06 a troy ounce. On Monday, prices spiked to $21.09, the most since July 2014.