UPDATED: Gold falls as dollar firms ahead of U.S. jobs data

Gold prices slipped nearly 1% on Thursday to hit their lowest in about a week as the dollar strengthened, while investors awaited the latest readings on the U.S. labor market to gauge economic recovery and future monetary policy.

Spot gold was down 0.8% to $1,893.61 per ounce by 0922 GMT. U.S. gold futures eased 0.7% to $1,895.80.

The U.S. Labor Department is expected to release initial weekly jobless claims data later in the day, followed by non-farm payroll numbers on Friday.

“(Gold) is probably in a critical phase from a technical perspective with the move up and down around $1,900/oz,” said UBS analyst Giovanni Staunovo, adding factors including a slightly stronger dollar were pressuring the metal.

While prices in the near term will be driven by still elevated inflation, gold is expected to move downwards over the next six to 12 months on expectation that at some point the U.S. Federal Reserve will speak about tapering, Staunovo said.

The dollar index edged 0.1% higher against its rivals, making gold less appealing for other currency holders.

The U.S. economic recovery accelerated in recent weeks even as a long list of supply chain troubles, hiring difficulties, and rising prices cascaded through the country, Fed officials said on Wednesday.

Fed officials have started hinting at possible tapering discussions and on Wednesday, the central bank said it would begin to unwind the corporate bond holdings it amassed through an emergency facility last year – another sign of pandemic measures coming to an end.

“Employment is likely to become a decisive factor, with a high reading having the potential to force the Fed to start thinking about tapering its current monetary and asset purchase policies,” Ricardo Evangelista, a senior analyst at ActivTrades, said in a note.

Elsewhere, silver edged 1.4% lower to $27.80 per ounce, palladium fell 0.5% to $2,842.77, while platinum slipped 0.6% to $1,182.79.

Photo: A resident weighs his necklace made of gold from mining in Casalugan, Camarines Norte province, Philippines. EPA-EFE/MARK R. CRISTINO