Gold prices fall by more than 2 Thursday to drop below a key resistance level as the U.S. dollar strengthened following a jump in U.S. privatesector payrolls data for May .
U.S. privatesector employment surged by 978,000 in May, according to the ADP National Economic Report released Thursday. That was well above the rise of 680,000 forecast by economists surveyed by The Wall Street Journal.
Government data, meanwhile, showed U.S. Initial weekly jobless claims dropped for a fifth week in a row, by 20,000 to 385,000.
Job growth is key to the short term trend in the greenback, as well as the gold price, said Chintan Karnani, director of research at Insignia Consultants, in a market update.
Following the data, the ICE U.S. Dollar Index rose 0.5. A stronger dollar can make assets priced in the currency such as gold less attractive to overseas buyers.
Still, Karnani questioned whether gold has formed a shortterm top following the ADP jobs data, and said that would depend on the nonfarm payrolls numbers due out Friday.
If the May NFP rise tops 700,000, along with other positive parameters, then gold will form a shortterm top, he said.
Economists forecast an overall increase of 671,000 new jobs in May in the Labor Department data due Friday.
In Thursday dealings, gold for August delivery fell 2.2, or 41.20, to 1,868.70 an ounce after settling at 1,909.90 on Wednesday. The mostactive contract is poised to settle under the key technical level of 1,900, a level it breeched…