Investing.com - Gold futures struggled for direction on Thursday, as investors awaited the conclusion of the European Central Bank's monthly policy meeting later in the session as well upcoming data on U.S. employment.
Gold for December delivery on the Comex division of the New York Mercantile Exchange dipped $1.50, or 0.13%, to trade at $1,131.90 a troy ounce during European morning hours.
A day earlier, gold dropped $6.20, or 0.54%, as a broadly stronger U.S. dollar and surging equity markets dampened the appeal of the yellow metal.
Investors were looking ahead to the European Central Bank’s policy meeting later Thursday, with the bank widely expected to keep interest rates unchanged. The central bank was also expected to cut its inflation forecast due to ongoing falls in oil prices and slowing growth in China.
The rate announcement will be followed by a post-policy meeting press conference with President Mario Draghi at 8:30AM ET, amid expectations for a dovish message.
Meanwhile, the U.S. will release a weekly report on initial jobless claims as well as data on the trade balance at 8:30AM ET. At 10:00AM, the U.S. Institute of Supply Management is to report on service sector growth for August.
Market participants also looked ahead to Friday’s nonfarm payrolls report, which could help to provide clarity on the likelihood of a near-term interest rate hike.
The consensus forecast is that the data will show jobs growth of 220,000 last month, following an increase of 215,000 in July, while the unemployment rate is forecast to decline to 5.2% from 5.3%.
A strong jobs report was likely to add to indications that the Federal Reserve will raise rates in September, while a weak number could push back expectations to December.
Recent turmoil in global financial markets has raised doubts over whether the Fed will hold off hiking interest rates from record lows at its upcoming policy meeting on September 17.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
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 December delivery on the Comex division of the New York Mercantile Exchange rallied 3.2 cents, or 1.37%, to trade at $2.361 a pound.
Copper's gains came as a sharp rebound in global equity markets helped soothe investors' tattered nerves. Most Asian markets ended higher on Thursday as strong overnight gains on Wall Street and a market holiday in China supported risk appetite.
The red metal sank to a six-year low of $2.202 on August 24 as concerns over the health of China's economy and steep declines on Chinese stock markets dampened appetite for the red metal.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.