London - Gold declined in London on speculation a political rift in Portugal will be resolved today and as investors awaited US jobs data tomorrow that may provide clues to the Federal Reserve’s plans to taper stimulus.
Data may show US employers added more jobs last month.
US markets are shut today for Independence Day.
The yield on Portuguese benchmark bonds dropped from the highest since November before Paulo Portas, the minister whose resignation this week threatened to bring down the government, meets Prime Minister Pedro Passos Coelho to try to overcome differences on budget policy.
“The non-farm payrolls will be an important thing to watch,” said Saeed Amen, an analyst at Nomura International Plc in London, adding that liquidity will be low because of the US holiday.
“I think the situation has calmed down in Portugal.”
Gold for immediate delivery fell 0.2 percent to $1,250.37 an ounce by 10:18 a.m. in London.
Prices rose 0.8 percent yesterday after slumping to $1,180.50 on June 28, the lowest since August 2010.
Gold for August delivery slid 0.2 percent to $1,249.10 an ounce on the Comex, following yesterday’s 0.7 percent gain.
“The labor market is the key focus of the Fed’s decision- making process with regard to tapering its monthly asset purchases,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report.
“Today, the ECB monthly statement will dominate headlines, adding to some thin and choppy trading in gold.”
Trading Volumes
Futures trading volumes were 46 percent lower than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
Bullion declined 23 percent in the second quarter as US Federal Reserve Chairman Ben S. Bernanke said that the central bank may slow its asset purchases this year if the economy continues to improve.
The European Central Bank and the Bank of England will announce their monthly policy decisions today.
“US Independence Day combined with the beginning of the summer holiday in many countries will keep activity relatively subdued,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen.
“ETFs continue to see reduction and until this change the upside seems limited.”
Assets in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, were unchanged yesterday after decreasing to 964.69 metric tons as of July 2, the least since 2009.
Silver for immediate delivery fell 0.9 percent to $19.5975 an ounce.
Platinum was little changed at $1,344.50 an ounce and palladium declined 0.5 percent to $681.50 an ounce. - Bloomberg News