Gold to snap 4 month winning run; US data, election eyed

Wednesday, 31 October 2012 09:43

Posted by Shoaib-ur-Rehman Siddiqui

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SINGAPORE: Gold edged up on Wednesday but was poised to snap a four-month winning streak, with investors staying on the sidelines ahead of key US employment data and in the wake of Hurricane Sandy.

 

Spot gold was moving in a range of about $3, after trading little changed in thin volume in the previous session when Sandy wreaked havoc on much of the eastern United States.

 

The precious metal is likely to remain stuck in a tight band in the coming days, ahead of the release of a key US payrolls report and next week's US presidential election, traders and analysts said.

 

"There are a lot of event risks -- nonfarm payrolls, the US election, a change of power in China, plus the routine policy meetings of various central banks," said a Singapore-based trader.

 

Economists expect US job growth to have picked up slightly in October, but not enough to prevent the unemployment rate from rising off a four-year low.

 

Spot gold had inched up 0.2 percent to $1,711.76 an ounce by 0319 GMT, on course for a monthly drop of more than 3 percent, its biggest one-month decline since May.

 

US gold was trading nearly flat at $1,712.50.

 

Technical analysis suggested spot gold could rebound to $1,730 an ounce as it has climbed above a falling channel, said Reuters market analyst Wang Tao.