WASHINGTON (dpa-AFX) - Gold prices traded sharply lower on Friday ahead of the U.S. jobs report due later in the day that could influence the timing and pace of Fed rate cuts.
Spot gold tumbled 1.6 percent to $2,338.90 per ounce while U.S. gold futures were down 1.4 percent at $2,357.40.
The heavy selling comes as new data showed China's central bank has paused gold purchases in May after 18 months of buying.
The May data on China's gold reserves revealed that the backlog remained steady at 72.80 million fine troy oz at the end of May, unchanged from April.
Investors also opted to move to the sidelines ahead of the release of the closely watched monthly employment details from the United States.
U.S. employment is expected to have increased by 185,000 jobs in May after an increase of 175,000 jobs in April. The unemployment rate is expected to remain at 3.9 percent.
Investors are pinning hopes for interest-rate cuts by the Federal Reserve later this year after European Central Bank and the Bank of Canada cut interest rates.
Currently, the probability of U.S. Federal Reserve's first interest rate cut is rated at 81 percent for September and 83 percent for November, with a strong likelihood of another reduction in December.
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