Gold prices decline before U.S. Nonfarm Payrolls and Unemployment Rate

Gold further declined on Friday with important U.S. employment data on tap. Later in the day U.S. data on Average Hourly Earnings, Nonfarm Payrolls and the Unemployment rate (13:30GMT) followed by FOMC member's Dennis Lockhart's speech (17:45GMT) will be in the focus.

Analysts predict that in January the US economy added 231,000 jobs, while the unemployment rate is projected to remain unchanged at 5.6%. Strong employment rates in the non-agricultural sector are likely to increase speculation about the timing for hiking rates by the Federal Reserve. A future interest rate hike adds pressure on gold. Higher interest rates make gold less attractive as the metal is not yield-bearing. A stronger greenback recently also weighed on the dollar-denominated metal as it makes it more expensive for holders of other currencies.

Yesterday gold declined on mixed U.S. data. Concerns over the developments in Greece were in the focus too after the European Central Bank said it would no longer accept Greek bonds as collateral for lending.

In January gold prices increased by almost 8% as the precious metal was sought after as safe-haven asset.

The precious metal is currently quoted at USD1,263.90, -0,11% a troy ounce. On Thursday the 22^nd of January gold reached a five-month high at USD1,307.40.