U.S. dollar gold prices climbed back towards $1,556 per ounce Friday morning in London, the level that was until yesterday's falls the 2013 low, as stocks and commodities fell ahead of the release of monthly U.S. jobs data.
Gold in Sterling climbed back above £1,020 an ounce, up from a three-month low hit yesterday, while gold in Euros climbed back above €1,200 an ounce, after touching its lowest level since February.
Silver briefly edged back above $28 an ounce, having fallen to eight-month lows yesterday, while longer-dated US Treasuries gained.
The latest US Employment Situation report, which includes the nonfarm payrolls figures for the number of jobs added last month as well as the latest unemployment rate, is due to be released at 08.30 Washington, D.C. time.
A day earlier, gold sank to a 10-month low in Dollar terms Thursday, briefly touching $1540 an ounce.
"The fact that gold failed to hold the intraday lows in the $1,540 area is a bit of a concern for the bearish trend in the short-term," say technical analysts at Scotia Mocatta. "There is a big support level between $1,522 and $1,532 which will have to be cleared before we see another large move down in gold."
The gold price will average $1,730 an ounce this year, trading in a range between $1,530 and $1,850, according to forecasts published Thursday by metals consultancy Thomson Reuters GFMS.
GFMS added however that an improving economic backdrop "could easily entail the start of a secular bear market" in 2014. At the launch of its Gold Survey 2013 report, GFMS also noted that gold exchange traded funds saw outflows of 177 tonnes in the first three months of 2012, equivalent to 63% of the amount they added over the whole of 2012.
As of Thursday, the volume of gold backing shares in the world's biggest gold ETF, SPDR Gold Trust (ticker: GLD), was down more than 10% since the start of the year.
Hedge fund Paulson & Co., which latest available data show held around 5% of the GLD, saw its Gold Fund fall by 27.9% in the first quarter, the Wall Street Journal reports, with the firm citing "implied volatility in the gold derivatives market". The Dollar gold price was down around 4% over the same period.
"The main driver behind gold's weakness this year has been the focus on global growth and that's meant rotation out of defensive assets like gold," says UBS analyst Joni Teves.
"There's this weak sentiment and it's been feeding on itself. Central banks continue to pursue exceptionally loose monetary policies and create a still supportive environment for gold."
"Investors are reshuffling commodity investments into equities," adds Commerzbank analyst Daniel Briesemann.
"We find it somewhat hard to understand the current underperformance of commodities given that the market environment is characterized by at least some economic recovery. We think that the drop is exaggerated."
Police in Italy on Sunday seized gold bars worth an estimated €4.5 million after stopping a car trying to cross the border into Switzerland, according to press reports.
Friday marks the 80th anniversary of Executive Order 6102, the confiscation of privately-held gold by President Roosevelt in 1933.