Gold touched its highest level since last November on Friday, taking a cue from euro strength after the European Central Bank (ECB) reiterated readiness to shore up indebted nations, leaving focus on a key US employment report for further direction.
The ECB kept interest rates unchanged on Thursday and said it was ready to buy more government bonds from debt-laden nations, as risks to growth remained.
Having pierced $1,795 earlier on Friday, spot gold was up 0.1 percent at $1,789.29 an ounce at 12:43 SA time. The metal was on course to book its strongest strongest weekly gain since mid-September.
US gold futures were marginally lower at $1,792.00, having earlier touched their highest level since February, with investors preferring to keep their powder dry ahead of the jobs numbers.
“The general consensus is that it will break the psychologically key $1,800 level and if it can close above there, it will move towards $1,850,” said David Govett, head of precious metals at Marex Spectron.
JOBS
The US non-farm payrolls report for September is being watched for an indication of whether the Federal Reserve's third round of quantitive easing is having the desired effect on the labour market.
A Reuters poll found that the report, expected at 14:30 SA time, will show 113,000 workers had been added to payrolls in September, an increase on 96,000 added the previous month.
Analysts said Wednesday's encouraging private employment data was not enough to alter the view that the Fed will keep interest rates low until it sees signs of substantial economic progress.
“There doesn't seem to be anything else they can do besides pumping more money into the economy,” said Ronald Leung, a dealer at Lee Cheong Gold Dealers in Hong Kong.
Physical buying has picked up in India, the world's largest buyer of bullion, where an appreciation in the rupee has brought domestic prices to a five-week low.
Exchange-traded funds backed by physical gold also increased their holdings of the metal, adding another 418,611 ounces on Oct. 4. SPDR Gold Trust, the world's largest gold ETF, reported record holdings of 1,333.44 tonnes of bullion on Thursday.
SOUTH AFRICAN STRIKES INTENSIFY
Gold priced in South African rand hit a record high at 15,366.38 rand per ounce on Friday, as labour unrest continued to grip Africa's biggest economy. The South African currency fell 1.2 percent against the dollar earlier in the day.
Clashes between police and striking workers at Anglo American Plantinum's Rustenburg mine intensified on Friday. One demonstrator was killed at the site after police shot rubber bullets at crowds, miners told Reuters.
The unrest has spread across other other industries in South Africa. Oil-producer Shell declared force majeure on fuel deliveries on Friday. Force majeure is a measure that allows a company to sidestep its contractual obligations due to events beyond its control.
However, the strikes in South Africa, accounting for 80 percent of the worlds platinum reserves, failed to support prices among the platinum group metals.
Spot platinum dropped 0.4 percent to $1,7091.74 per ounce, after reaching a seven-month high earlier in the session. However, the metal was heading for its ninth session of gains and a weekly rise of 2.8 percent.
Spot palladium slipped 0.1 percent to $666.50 per ounce and silver drifted lower, with spot prices down 0.2 percent at $34.89 an ounce. - Reuters