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Gold prices remain lower after upbeat ADP jobs report

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Shutterstock photo - Gold remained lower on Wednesday, after data showed that U.S. non-farm private employment rose at the strongest pace in two years last month, fuelling speculation the U.S. economy will be strong enough to allow the Federal Reserve to continue withdrawing support through 2014.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,225.90 a troy ounce during U.S. morning trade, down 0.3%. Gold prices held in a tight range between USD1,220.70 a troy ounce and USD1,231.70 a troy ounce.

The February contract settled 0.68% lower on Tuesday to end at USD1,229.60 a troy ounce. Futures were likely to find support at USD1,212.60 a troy ounce, the low from January 6 and resistance at USD1,247.70, the high from January 6.

Meanwhile, silver for March delivery dropped 0.9% to trade at USD19.60 a troy ounce. The March contract ended Tuesday's session with a loss of 1.57% to settle at USD19.78 a troy ounce.

Payroll processing firm ADP said in a report earlier that non-farm private employment rose by a seasonally adjusted 238,000 in December, easily surpassing expectations for an increase of 200,000. November's figure was revised up to a gain of 229,000 from a previously reported increase of 215,000.

While not viewed as a reliable guide for the government jobs report due on Friday, January 10, it does give guidance on private-sector hiring.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.3% to trade at 81.24, the highest since November 21.

A stronger U.S. dollar usually weighs on precious metals as it dampens their appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

Investors were now turning their attention to the minutes of the Fed's December meeting, due for release later Wednesday, for indications on the possible timing of further reductions in the central bank's stimulus program.

The Fed started to reduce its monthly bond-buying program by USD10 billion this month. Some market participants believe the central bank will likely taper its bond purchases by an additional USD10 billion in each of its next seven meetings before ending the program in December 2014, amid indications of an improving U.S. economy.

Elsewhere on the Comex, copper futures for March delivery inched up 0.45% to trade at USD3.375 a pound. offers an extensive set of professional tools for the financial markets.

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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.

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