Gold Steadies Near 1-Month High

Widely viewed as a haven asset amongst investors, gold prices found support for further upside ahead of the highly-anticipated US employment report due Friday that could set the tone for the pace of Fed rate hikes.  Economists are estimating that 178,000 new jobs were created in March, with the unemployment rate likely to remain steady at 4.70%. Today’s ADP nonfarm employment figure should give some hints as to the general job creation trend.

However, the recent recovery in the US dollar and its historical inverse relationship with precious metals is capping gold’s gains. Technical analysts reckon that the current shift in sentiment should see gold rally towards $1265 - the highs for the year. Any further upside will depend on whether the bulls have the strength to push prices higher while on the downside, $1248 presents a strong floor.

In another sign of improving sentiment, Euro Area retail sales grew at a better than expected pace in February as shoppers spent more on clothing despite the higher inflation. Retail sales in the 19 countries that share the common currency increased by 0.70% in February on a month over month basis per data from Eurostat.

Economists polled by Reuters had forecast a 0.50% rise. On a year-over-year basis, the volume of sales grew by 1.80% in February, higher than the 1.40% increase projected by economists. Eurostat also revised its January figure higher to a positive 0.10% from -0.10%, while the yearly rate was also adjusted upwards to 1.50% from the previously announced 1.20% growth. Nevertheless, EURUSD remains stuck in a narrow trading range, with the pair last seen around 1.0670.