Investing.com - Gold prices edged lower on Thursday, as investors awaited the conclusion of the European Central Bank's monthly policy meeting as well upcoming data on U.S. employment.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery dipped $2.80, or 0.23%, to trade at $1,205.90 a troy ounce during European morning hours.
A day earlier, Comex gold prices rose $9.30, or 0.78%, to settle at $1,208.70 an ounce. Prices hit $1,141.70 on December 1 after Swiss voters rejected a proposal requiring the Swiss central bank to boost its gold reserves.
Futures were likely to find support at $1,141.70, the low from December 1, and resistance at $1,221.00, the high from December 1.
Also on the Comex, silver futures for March delivery inched up 10.1 cents, or 0.62%, to trade at $16.51 a troy ounce. Prices hit $14.42 on December 1, a level not seen since August 2009.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was at 89.02, the strongest level since May 2010.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Investors were awaiting the outcome of the ECB meeting later in the day, after recent weak economic data added to pressure on policymakers to introduce further stimulus measures to boost growth.
The bank was expected to stop short of announcing quantitative easing measures but could extend its program of asset purchases.
Meanwhile, market players looked ahead to the release of the latest U.S. nonfarm payrolls report on Friday, for further indications on the strength of the recovery in the labor market.
Market analysts expect the data to show that the U.S. economy added 225,000 jobs in November, after a gain of 214,000 in October, while the unemployment rate was forecast to hold steady at 5.8%.
A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could boost gold by undermining the argument for an early rate hike.
Gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Elsewhere in metals trading, copper for March delivery tacked on 1.8 cents, or 0.64%, to trade at $2.891 a pound, on hopes for a broad-based stimulus from China's central bank.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.