- Gold and silver prices weakened in cautious trade on Thursday, as investors stuck to the sidelines ahead of a policy meeting by the European Central Bank later in the day as well as the release of key U.S. economic data.

On the Comex division of the New York Mercantile Exchange, gold for June delivery held in a tight range between $1,285.80 a troy ounce and $1,294.20 an ounce.

Gold last traded at $1,287.50 an ounce during European morning hours, down 0.26%, or $3.40. Futures rallied 0.84%, or $10.80 an ounce, on Wednesday to settle at $1,290.80.

Gold futures were likely to find support at $1,277.40 a troy ounce, the low from April 1 and resistance at $1,299.30, the high from March 31.

Meanwhile, silver for May delivery lost 0.83%, or 16.7 cents, to trade at $19.88 a troy ounce. Silver ended Wednesday’s session up 1.84%, or 36.2 cents, to settle at $20.05 an ounce.

Silver futures were likely to find support at $19.63 an ounce, the low from April 1 and resistance at $20.14, the high from April 2.

Recent weak euro zone inflation data has added to pressure on the ECB to take steps to stave off the risk of deflation.

However, most investors expected the ECB to leave monetary policy on hold, after Bundesbank head Jens Weidmann said over the weekend that the region is not in a deflationary cycle, and that the recent slowdown in inflation was due in large part to temporary factors, such as falls in food and energy prices.

Market players also looked ahead to key U.S. economic data later in the day for further indications on the strength of the economy and the future course of monetary policy.

The U.S. is to publish the weekly report on initial jobless claims as well as a report on service sector activity. Investors were also beginning to turn their attention to Friday’s highly-anticipated nonfarm payrolls data.

On Wednesday, payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 191,000 in March, adding to hopes that the slowdown in economic activity seen at the start of the year would be temporary.

Gold and silver have been under heavy selling pressure in recent weeks as upbeat U.S. economic data underlined expectations that the Federal Reserve will begin to raise rates sooner than previously thought.

Elsewhere on the Comex, copper for May delivery slumped 0.57%, or 1.7 cents, to trade at $3.028 a pound after China unveiled a mini-stimulus package, disappointing market expectations for more drastic measures.

China''s State Council said Wednesday that it will increase spending on railways and housing, as policymakers attempt to boost slowing growth in Asia’s largest economy.

However, the announcement disappointed market participants, who had expected more stimulus in the form of looser monetary policy, such as a cut in bank reserve requirements.

Mixed data on China’s services sector also weighed. HSBC’s China services Purchasing Managers’ Index rose to 51.9 last month from 51.0 in February, but the official nonmanufacturing PMI fell to 54.5 in March from 55.0 in the previous month.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

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