Gold edged up on Friday, set for its biggest
weekly gain in a month after US data showed the economy had generated
more jobs in the last three months than previously thought but not fast
enough to cut unemployment, which weighed on the dollar.
US nonfarm payrolls rose 103,000
last month, compared with forecasts for a rise of 60,000, while
revisions to data for July and August showed 99,000 more jobs were added
in that time than initially reported, while the unemployment rate stood
unchanged at 9.1 percent, the Labor Department said.
Gold rose 0.2 percent to trade at
$1,652.59 an ounce by 1325 GMT, having touched an intraday high of
$1,665.99 earlier, while US December gold futures “To me, (the data)
doesn't change the interest-rate environment for gold, which is still
very positive, with more gains ahead. And from where we are in real
interest rate terms, you should see gold returns of 30 percent
year-on-year,” said Deutsche Bank analyst Michael Lewis, whose bank
expects an average gold price of $1,750 an ounce in the last quarter of
this year.
“I don't think the payrolls number
changes that backdrop, which still looks quite supportive, but I
wouldn't be surprised if gold came off a little bit, but I think it's
probably more important for equity markets and industrial metals.”
PLATINUM BOUNCES
Platinum rose by as much as 2.0
percent on the day to a session high of $1,536.24, to later trade at
$1,526.25, up for a third consecutive day in its longest stretch of
gains in two months.
Platinum
has lost more than 16 percent over the last month and the price has
tumbled to its lowest in nearly two years, after evidence of a slowing
euro zone economy, upon which platinum relies for industrial demand,
raised fears of another slide into recession.
Palladium rose by 0.3 percent on
the day to $604.47 an ounce, having fallen earlier by as much as 1.7
percent, but was still set for its fifth consecutive weekly loss.
European shares rose to their
highest in five weeks following the US jobs data. This added to the
optimistic tone already underpinning the equity markets, after the
European Central Bank's decision on Thursday to leave interest rates
unchanged at 1.5 percent, but anchor short-term borrowing costs for
banks and sovereign borrowers by providing extra liquidity.
The gold price has risen by 1.8
percent so far this week, its largest weekly gain since September,
buoyed by a surge in consumer demand that materialised with last month's
10.9 percent drop below $1,700 an ounce.
“What you're seeing is demand for
physical metal continues to be very, very strong. China was off all this
week. They'll be back next week and I presume demand will only
increase, so I think that is why the market has held so nicely around
this $1,600 mark,” said MKS Finance head of trading Afshin Nabavi.
“The market was extremely bearish
in the dollar and extremely bullish on precious ... It's not a one-way
street all the time. We needed a correction and don't forget we are
talking about less than $300 in a commodity that was priced close to
$2,000,” he said.
“I
still wouldn't mind seeing it have a bit more of a correction on the
downside first to clean up some of the spec length over the market and
towards the end of the year, it will be closer to $2,000 again,” he
added.
Premiums for physical delivery in
Asia have risen to their highest levels since the start of the year,
reflecting an increase in demand for metal in a key-consuming region,
with jewellers in China, Indonesia, Vietnam and top consumer India
entering the market.
Following an outflow of nearly
half a million ounces of gold from global exchange-traded funds in
September, when the price fell by more than 20 percent from a record
$1,920.30, ETFs have recovered nearly a quarter of that metal as
investors have also taken the opportunity to buy at lower levels.
In other precious metals, silver
was down by more than half a percent at $31.72 an ounce, while platinum
rose by 0.6 percent on the day to trade at $1,514.49 an ounce. -
Reuters
