Investing.com - Gold prices fell in Asia below a key support level as expectations for a Fed rate hike next week appear on track, though U.S. jobs data later in the day is key and locally a decision by the Constitution Court to uphold the impeachment of President Park Geun-hye the focus came against a backdrop of tension on the Korean Peninsula and a scandal with top chaebol Samsung (KS:005930) Group.
Gold for April delivery on the Comex division of the New York Mercantile Exchange fell 0.18% to trade at $1,198.20 a troy ounce, dropping below the key $1,200 level. Elsewhere, silver futures dropped 0.38% to $16.88 a troy ounce while copper rose 0.08% to 2.580 a pound.
Investors are also focused on softer than expected initial jobless claims data that came a day ahead of a key nonfarm payrolls report for February due to be released on Friday, with a gain of 190,000 jobs expected and seen as key to cement widespread expectations of a Fed rate hike.
Overnight, gold prices slipped to a five-week low on Thursday, despite a slump in the dollar, as increasing expectations of a March Rate hike continued to soften demand for the yellow-metal.
Gold struggled to take advantage of a pull-back in the dollar, after initial jobless claims missed analysts’ forecasts while investors’ expectations of a March rate hike grew ahead of key non-farm payrolls report due to be released on Friday. U.S. Department of Labor said Thursday, initial jobless claims increased by 20,000 to 243,000 in the week ending March 4 from the previous week’s total of 223,000. Analysts expected jobless claims to rise by 12,000 to 235,000 last week.
The softer initial jobless claims data came a day ahead of Friday’s nonfarm payrolls for February, viewed as a critical barometer of the U.S. economy and represents the final key economic data point ahead of the Federal Reserve’s policy meeting on March 14-15.
According to Investing.com’s Fed rate monitor tool, 90% of traders expect a rate hike in March, compared to just 80% of traders on Monday. Gold is sensitive to moves in U.S. interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.