05.07.201307:41:43UTC+00Gold slumps ahead of U.S. jobs data, but up on week

Gold value drop down in electronic trade Friday, feeling the weight of the U.S. dollar’s increase ahead of the the release of the widely watched monthly U.S. jobs report.

Gold for August delivery pulled back $8.90, or 0.7%, to $1,243.00. Trading on the Comex division of the New York Mercantile Exchange was due to resume later Friday following Thursday’s closure for Independence Day.

September copper futures missed 6 cents, or 1.9%, to $3.12 a pound, and September silver declined 43 cents, or 2.2%, to $19.27 an ounce.

The metal futures’ dropped came as the dollar strengthens. Dollar-denominated commodities tend to come under pressure when the greenback skyrockets, as it makes them more expensive to holders of other currencies.

The U.S. currency saw particularly strong wins versus the euro and the British pound after the European Central Bank and the Bank of England on Thursday each indicated there were no plans in the pipeline to reduce monetary stimulus. European Central Bank President Mario Draghi said at a press conference Thursday that euro-zone interest rates would remain low or may even go lower.

Investors on Friday will turn their attention to U.S. jobs figures for June and what they may mean for the future of monetary stimulus from the Federal Reserve.

Fed Chairman Ben Bernanke last month said the central bank may slow the pace of bond purchases this year if the economy continues to show improvement. The Fed currently buys $85 billion a month in U.S. Treasurys to aid economic growth.

Change in the Fed’s monetary policy “is particularly bad news for precious metals. Less monetary expansion by the Fed strengthens the U.S. dollar and hence puts some downward pressure on all commodities prices,” Itaú BBA economists led by Ilan Goldfajn wrote to clients Thursday.

“However, it also increases real interest rates and reduces the risks of high inflation ahead. Both factors are particularly harmful to the price of precious metals,” said Itaú.

Economists polled by MarketWatch expected a net gain of 155,000 net jobs in June. The unemployment rate is expected to decline to 7.5% from 7.6%, with the Fed looking for it to fall toward 6.5% by next year.

Tracking most-active contracts, gold prices have dropped 9% since Bernanke’s talk about tapering stimulus. Gold closed the second quarter with a 23% slide. But the metal found some relief this week, with prices poised for a gain of about 1.6%, which would be first weekly rise for gold in three weeks.

In other metals moves Friday, platinum for October delivery relinquished $10.80, or 0.8%, to $1,336 an ounce, and September palladium surrendered $11.80, or 1.7%, to $673.90 an ounce.