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Gold futures drop to 2-week lows ahead of U.S. jobs report

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Investing.com - Gold futures dropped to two-week lows on Friday, as upbeat U.S. economic reports on Thursday sent the U.S. dollar higher, while markets eyed the release of highly anticipated U.S. employment data later in the trading session.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,289.65 a troy ounce during European afternoon hours, tumbling 1.64%.

The December contract settled down 0.14%, at USD1,311.2 a troy ounce on Thursday.

Gold futures were likely to find support at USD1,273.95 a troy ounce, the low from July 19 and resistance at USD1,330.55, Thursday's high.

Gold prices moved lower after the Institute of Supply Management on Thursday said its purchasing managers index rose to 55.4 in July from a reading of 50.9 in June, expanding at the fastest rate since April 2011.

Analysts had expected the index to rise to 52.0 last month.

Separately, the Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 26 fell by 19,000 to a seasonally adjusted 326,000, the lowest level since January 2008.

Jobless claims for the preceding week were revised down to a gain of 345,000, from a previously reported 343,000.

Gold futures gained ground earlier in the week, after the Federal Reserve said on Wednesday that it would keep buying USD85 billion a month in mortgage and Treasury securities and gave no hint of plans to pare its stimulus program.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.

Traders were looking ahead to highly-anticipated data on U.S. nonfarm payrolls due later Friday for indications of how the recovery in the U.S. labor market is progressing.

Elsewhere on the Comex, silver for September delivery dropped 0.95% to trade at USD19.435 a troy ounce, while copper for September delivery gained 0.52% to trade at USD3.182 a pound.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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