Gold may fall on firming US jobs data as expectations for an early end to the Federal Reserve's stimulus efforts dents demand for an inflation hedge.
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All eyes are on December's US Employment report. Expectations call for nonfarm payrolls to rise 153,000 compared with an increase of 146,000 in the prior month. With the Fed having defined a data-linked framework for guiding the path of monetary policy, a better-than-expected print is likely to drive bets on an early end to stimulus efforts (as foreshadowed in minutes from December's FOMC minutes ). This is likely to weigh on gold and silver amid eroding inflation hedge demand. It is unclear for now whether risk appetite will react favorably (in terms of improving growth) or negatively (on stimulus withdrawal fears), clouding the outlook for cycle-sensitive crude oil and copper prices.The ISM Non-Manufacturing Composite reading as well as November's Factory Orders data are also on tap.
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