Investing.com - Gold shook off earlier weakness to trade modestly higher on Wednesday, after data showed that U.S. non-farm private employment rose less than expected in February.
Payroll processing firm ADP said non-farm private employment rose by 212,000 last month, below expectations for an increase of 220,000.
The economy created 250,000 jobs in January, whose figure was upwardly revised from a previously reported 213,000.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery ticked up $1.20, or 0.1%, to trade at $1,205.60 a troy ounce during U.S. morning hours. Prices were at $1,202.40 ahead of the data.
Futures were likely to find support at $1,194.60, the low from March 3, and resistance at $1,223.00, the high from March 2.
Traders now 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 240,000 jobs in February, slowing from a gain of 257,000 in January, while the unemployment rate was forecast to decline to 5.6% from 5.7%.
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.
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.
On Tuesday, gold dipped $3.80, or 0.31%, to settle at $1,204.40 an ounce as a broadly stronger U.S. dollar dampened the appeal of the metal.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% to hit a five-week high of 95.69 early on Wednesday.
The greenback remained supported amid expectations for higher interest rates in the U.S.
Meanwhile, the euro was likely to remain under pressure as investors turned their attention to the upcoming European Central Bank meeting on Thursday, when it was expected to announce details of its quantitative easing program.
Also on the Comex, silver futures for May delivery dipped 2.3 cents, or 0.14%, to trade at $16.27 a troy ounce. On Tuesday, silver slumped 15.5 cents, or 0.94%, to close at $16.29 an ounce.
Elsewhere in metals trading, copper for May delivery inched up 0.3 cents, or 0.09%, to trade at $2.659 a pound as investors looked ahead to the start of China’s National People’s Congress annual meeting on Thursday.
The latest meeting of the legislature, the second to be overseen by President Xi Jinping and Premier Li Keqiang, comes amid lingering concerns over the health of the country’s economy.
Analysts expect Premier Li to lower China’s economic growth target for 2015 to 7.0% from its level of “around 7.5%” for last year and that further stimulus measures will be announced as deflation risks rise.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.