Gold prices extended the gains on Thursday in volatile trading, where gold prices received strong bullish momentum after the European Central Bank surprised markets by cutting the benchmark interest rates by 25 basis points to 1.25%, while markets were expecting the ECB to leave rates unchanged. Moreover, the high level of uncertainty surrounding Greece also supported gold prices, where reports suggested that Greek Prime Minister could resign as a result of the referendum on the new bailout deal that was approved last week.
Traders were also focused on the United States, as the jobless claims dropped below expectations, which spread optimism earlier in the session. Nonetheless, the ISM services index slowed in October opposite to expectations, which raised concerns that the world’s largest economy is slowing.
Moreover, demand for gold as a safe haven seems to have returned, however, we still expect volatility to continue to dominate gold’s movement, where the huge uncertainty surrounding Greece continues to be the major market mover. Traders will be eyeing the G20 meeting to see whether they will provide more support to help solve the European debt crisis. The main focus though on Friday will be the infamous jobs report from the United States, where the Nonfarm payrolls are expected to rise by 95,000 jobs, and unemployment is expected to remain unchanged at 9.1%.
