NEW YORK, Nov 2 Gold futures in New York touched $800 early on Friday on inflation fears sparked by stronger crude oil prices and a record low dollar following a surprisingly strong U.S. jobs report.
"We had a bit of gyration but the buyers stepped in and didn't let prices go down. You have interest. This could become a runaway market if we don't get the pullback that people want," said Jonathan Jossen, an independent COMEX floor trader.
At 10:46 a.m. EDT (1446 GMT), most-active December gold GCZ7 on the COMEX division of the New York Mercantile Exchange was up $4.10 at $797.80 an ounce, after hitting a early-session high of $800.80. It hit a low of $790.00.
Jossen also cited heavy trading of both gold futures call and put options.
U.S. employers added a surprisingly strong 166,000 new nonfarm jobs in October, well ahead of forecasts in an early sign that consumer incomes may be better supported than thought heading into the fourth quarter, according to a government report. [ID:nN02551610]
The dollar initially gained on the payrolls data but soon fell to a record low against the euro. It gained ground versus the yen after strong data on the job market encouraged investors to enter risky carry trades.
Oil jumped more than $1 and held above $94 a barrel as concerns about tight supplies in the run-up to winter prevented a major sell-off.
Inflation concerns boosted gold as investors worried that robust energy prices and more expensive import goods because of a weak dollar could lead to rising prices.
"They say that inflation is under control. But the market is telling you differently. Historically, gold has been a barometer of inflation," said one precious metals dealer in New York.
The dealer added that gold was currently a bull market.
News of strikes in African gold mines also extended support to bullion.
AngloGold Ashanti Ltd (ANGJ.J) shut one of its larger mines in South Africa on Friday after a miner was killed in a rock-fall. A miners' strike to protest a spate of mine deaths in the country loomed.
AngloGold, the world's third-biggest gold producer, shut its TauTona mine after the worker died in the early hours of Friday. [ID:nL02111288]
Meanwhile, a strike disrupting Tanzania's Bulyanhulu gold mine, owned by Canada's Barrick Gold Corp (ABX.TO), will continue until workers' grievances on pay, health and risk allowances are met, a union official said on Friday. [ID:nL02173590]
In the United States, the U.S. House of Representatives on Thursday voted to slap the first-ever federal royalties on gold, silver, copper, uranium and other minerals mined on public lands. [ID:nN01547729]
The House voted 244-166 for the Hardrock Mining and Reclamation Act of 2007, which would levy an 8 percent royalty on the gross revenue from new hard-rock mining activities and impose a 4 percent royalty on existing operations. But the White House threatened to veto the bill
Spot bullion XAU= was quoted at $795.20/796.00, compared with the Thursday New York close at $788.90/789.70. London bullion dealers fixed the morning spot reference price at $790.75.
COMEX December silver SIZ7 was down 5.5 cents at $14.270 an ounce, trading between $14.130 and $14.405.
Spot silver XAG= was quoted at $14.17/14.22, higher than Thursday's late New York quote of $14.15/14.20. London silver was fixed at $14.32.
NYMEX January platinum PLF8 was up 20 cents at $1,451.00 an ounce. Spot platinum XPT= was quoted at $1,441/1,445.
December palladium PAZ7 dropped $3.60 or 1 percent to $372.30 an ounce. Spot palladium XPD= fetched $367/372.
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