Published: Thursday, 11 Oct 2012 | 2:30 PM ET
Bullion could further consolidate gains after four consecutive monthly increases prior to October, analysts said. Its rally sent prices to an 11-month high last Friday, but its failure to break above $1,800 an ounce triggered technical weakness.
The metal, a traditional inflation hedge, was boosted by economic optimism after U.S. government data on Thursday showed jobless claims fell by a surprisingly large 30,000 last week to the lowest level in four and a half years.
“Gold is very much moving in line with other riskier assets, and any type of healthy economic data goes a long way to boost demand for gold and other riskier assets,” said Adam Sarhan, chief executive of Sarhan Capital.
Spot gold rose 0.3 percent on the day to $1,767 an ounce by 2:10 PM EDT (1810 GMT). The metal fell by more than 2 percent over the prior four trading days, its longest stretch of declines since June.
U.S. COMEX gold futures for December delivery settled up $5.50 at $1,770.60 an ounce, with trading volume about 40 percent below its 30-average, preliminary Reuters data showed.
Gold priced in euros rose for a fourth consecutive day to within 1 percent of its record high, underscoring bullion buying among Europeans as a safe haven amid economic uncertainty.
Gold rose along with the euro, which ignored Standard & Poor’s downgrade on Spain’s credit rating to one notch above junk. [ID:nL6E8LB5D3] Analysts said expectations of economic slowdown had already been factored into financial markets.
A Reuters polls of hundreds of economists worldwide showed that next year offers only a slight improvement for a global economy hit by recession in Europe and slowing or moribund growth in Asia and the United States.
PAUSING AFTER FOUR-MONTH RALLY
Gold was nearly flat in October, having risen by nearly 5 percent in September after the U.S. Federal Reserve said it would buy $40 billion of mortgage-backed bonds monthly to prop up the economy for as long as job creation remained sluggish.
Gold has risen by 13 percent or about $215 in 2012 so far, making it one of the best-performing commodities this year, with the majority of those gains occurring in the last two months.
In other precious metals, silver edged up 0.1 percent to $33.99 an ounce.
So far in 2012, silver has been the top performing precious metal, with a gain of nearly 24 percent, compared with a 20 percent rise in runner-up platinum, a 13 percent rally in gold and a 0.3 percent loss in palladium.
Platinum rose 0.6 percent to $1,676.99 an ounce, while palladium was up 0.1 percent at $646.97 an ounce.
The price of platinum has risen by 20 percent in the space of two months after a spate of violent mining strikes in South Africa shuttered much of the country’s production capacity.
A Reuters poll on Wednesday shows analysts are less optimistic about the price prospects for platinum this year and next, even with the constraints on supply. <PREC/POLL>
(Additional reporting by Amanda Cooper in London; Editing by Bob Burgdorfer)