London - Gold firmed on Tuesday as stock markets rose and the dollar weakened, but moves were limited ahead of a U.S. jobs report due later this week, a closely watched barometer of the world's biggest economy.
The precious metal is on course for its biggest monthly loss since May as a boost from the Federal Reserve's latest monetary stimulus plan - a potentially inflationary move which would also maintain pressure on interest rates - petered out.
As the extent of the programme has been linked to the health of the jobs market, Friday's U.S. non-farm payrolls report could potentially influence its scope.
A Reuters poll shows the economy is expected to have added 125,000 jobs last month, though the unemployment rate is seen at 7.9 percent, against 7.8 percent the previous month.
“An increase in unemployment is a reason to be positive on the gold price because we would see a greater possibility of further monetary expansion,” Deutsche Bank analyst Daniel Brebner said.
Gold was at $1,714.1 by 1149 GMT, up 0.25 percent, while U.S. gold for December rose $6.10 to $1,714.80. It hit an 11-month high above $1,795 in October after the Fed's stimulus plan, but pulled back after failing to break $1,800.
In the near term, it is taking some support from strength in European shares, as the initial damage inflicted by a powerful storm on the U.S. east coast looked to have been less severe than many had expected, and from the euro.
The Bank of Japan boosted its monetary stimulus for the second month in a row on Tuesday in response to intense political pressure for action and mounting evidence that the world's third-largest economy was on the cusp of recession.
Brebner said the Bank of Japan decision was supporting the gold price even though the move had been expected, as further monetary stimulus was seen as generally supportive to gold.
Mitsubishi analyst Matthew Turner said focus was also turning to next week's U.S. election. “The dollar might strengthen regardless of the election result. Political uncertainty would be reduced if there is a clear election victory,” Turner said.
SHOOTING AT AMPLATS MINE
Gold importers in India, traditionally the world's biggest gold consumer, bought the metal ahead of festivals as local prices held near two-month lows.
India's festival season peaks in November with Diwali, the Hindu festival of lights. Weddings also take place at this time, with gold jewellery part of the dowry daughters receive from their parents.
From a technical perspective, analysts who study past price patterns for clues on the next direction of trade flag up support for gold at $1,703 an ounce.
Analysts at ScotiaMocatta see support at $1,693, a retracement level in gold's move from its low of the year in May to its October high. “Resistance is at $1,722,” they added.
Platinum and palladium prices rose, bolstered by violence at a major South African platinum mine.
South African police fired rubber bullets and tear gas at striking Amplats miners who were protesting against a union-brokered deal to end a six-week wildcat walkout at the top platinum producer.
“If this situation worsens, platinum group metals prices could move higher,” Mitsubishi's Turner said.
Spot platinum was up 1.09 percent at $1,546.75 an ounce, and palladium was up 1.48 percent at $594.6 an ounce. Silver was up 1.01 percent at $32.08 an ounce. -Reuters