PRECIOUS-Gold slips lower on technical selling ahead of U.S. jobs data

Fri Nov 2, 2012 11:57am IST

* Good employment data could be negative for gold
    * Fall through $1,710 to $1,712/oz level triggers selling
    * Spot gold may fall to $1,698.39/oz -technicals
    * Coming Up: U.S. Oct nonfarm payrolls data; 1230 GMT

 (Adds comments, details; updates prices)
    By Rujun Shen
    SINGAPORE, Nov 2 (Reuters) - Gold edged down towards $1,700
an ounce on Friday, after a fall through an important support
level triggered some stop-loss selling as investors anxiously
await a key U.S. labour market report. 
    Gold fell as low as $1,705.79, heading for a fourth straight
week of losses ahead of the U.S. nonfarm payrolls data, which is
expected to show a pickup in jobs growth, though the
unemployment rate may still tick up from a near four-year low in
September. 
    The numbers will follow data on Thursday showing increasing
private employment, a drop in jobless claims, a sharp
improvement in consumer confidence and mixed signals from the
manufacturing sector. 
    "If the nonfarm payrolls data is very good, it will be
bearish for gold, as it will cut expectations for any additional
quantitative easing, and it will be fairly positive for the
dollar as well," said Nick Trevethan, a senior commodity
strategist at ANZ in Singapore.
    Chart analysis suggested that gold could test this year's
low of $1,527 hit in mid-May during the next three months, but
the price needed to pierce through strong support above $1,600,
he added.
    Short-term technical analysis also painted a gloomy picture.
Spot gold could fall to the Oct. 24 low of $1,698.39 an ounce as
a rebound from this level is complete, Reuters market analyst
Wang Tao said. 
    Spot gold fell 0.4 percent to $1,708.11 an ounce by
0611 GMT, on course for a minor drop from a week earlier.
    U.S. gold also inched down 0.4 percent, to
$1,708.70.
    The break below a key support level at $1,710-$1,712
triggered some stop-loss selling in gold, which moved very
little in the first hours of trading.
    "Length in gold is still very high, and much of it is
speculation-driven," said a Hong Kong-based trader.
    "We've seen plenty of re-loading by speculators in the past
few days and these positions are under pressure before the
payrolls data, after the decent ADP report."
    
    
    
    The dollar was poised to rise for a second day against a
basket of currencies, putting pressure on commodities
priced in the greenback as they become more expensive for buyers
holding other currencies. 
    In industry news, the world's top gold producer, Barrick
Gold Corp, reported a sharp drop in third-quarter
profit, nudged back the production date for its massive
Pascua-Lama gold and silver mine and increased its estimate on
costs. 
    Newmont Mining Corp, the world's second-largest gold
producer, reported a drop of 26 percent in quarterly profit as
production at its giant Indonesian copper and gold mine
plummeted and costs rose. 
    Platinum and palladium were both headed for their first
weekly gains after three weeks of straight falls, although spot
platinum lost half a percent to $1,556 and spot palladium
 fell 0.7 percent to $606.47.
    
      Precious metals prices 0611 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1708.11   -5.98   -0.35      9.23
  Spot Silver        31.98   -0.25   -0.78     15.49
  Spot Platinum    1556.00   -8.50   -0.54     11.70
  Spot Palladium    606.47   -4.53   -0.74     -7.05
  COMEX GOLD DEC2  1708.70   -6.80   -0.40      9.06        15385
  COMEX SILVER DEC2  32.02   -0.23   -0.72     14.69         4651
  Euro/Dollar       1.2900
  Dollar/Yen         80.26
  COMEX gold and silver contracts show the most active months

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