Investing.com - Gold futures edged higher in European trade on Thursday, as investors looked ahead to key U.S. employment data to gauge if the world's largest economy is strong enough to withstand further rate hikes this year.
The U.S. was to release the weekly report on initial jobless claims at 12:30GMT, or 8:30AM ET, followed by data on business activity in the Chicago region at 13:45GMT or 9:45AM ET.
Meanwhile, Chicago Fed President Charles Evans, San Francisco Fed President John Williams and New York Fed President William Dudley are due to speak throughout the day, as investors look to further judge the balance of opinion among policymakers on the prospect of further rate hikes.
Market players are also focusing on Friday's U.S. nonfarm payrolls report. The consensus forecast is that the data will also show jobs growth of 205,000 in March, the unemployment rate is forecast to hold steady at 4.9%, while average hourly earnings are expected to rise 0.2%.
An upbeat employment report would help support the case for the Fed to steadily tighten monetary policy this year.
Gold for June delivery on the Comex division of the New York Mercantile Exchange tacked on $4.20, or 0.34%, to trade at $1,232.80 a troy ounce by 08:15GMT, or 4:15AM ET.
A day earlier, gold rallied to a one-week high of $1,246.80 as investors scaled back expectations for how soon and how far U.S. interest rates might rise this year.
The shift came after Federal Reserve Chair Janet Yellen emphasized global dangers to growth and inflation, and thus the need to proceed "cautiously" on tightening policy.
The dovish comments were in direct contrast to recent hawkish remarks by other FOMC members, who suggested another move on interest rate may be just around the corner.
Investors and economists dialed back their rate hike expectations in wake of Yellen’s dovish outlook, with traders of interest-rate futures now seeing no rate rise before November. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Prices of the yellow metal are on track for a first quarter gain of 15%, its best such performance since the third quarter of 1986, as investors seek safe havens in the face of mounting instability in other financial markets and as fears over a China-led global economic slowdown make it tougher for the Fed to raise rates.
Also on the Comex, silver futures for May delivery inched up 9.4 cents, or 0.62%, to trade at $15.30 a troy ounce during morning hours in London, while copper futures shed 2.1 cents, or 0.96%, to $2.170 a pound.
Prices of the red metal dropped to a one-month low of $2.166 earlier in the day, as concerns over a slowdown in demand from top consumer China weighed.
The Asian nation is due to release monthly manufacturing data on Friday.
The China Federation of Logistics and Purchasing is to release data on March manufacturing sector activity at 1:00GMT on Friday, or 9:00PM ET Thursday, followed by the Caixin manufacturing index at 1:45GMT, or 9:45PM ET.
The official China's manufacturing purchasing managers' index is forecast to inch up 0.3 points to 49.3, while the Caixin survey is expected to rise to 48.3 from 48.0 in the preceding month.
A reading below 50.0 indicates industry contraction.