* Gold on track for strongest wkly performance in more than
* Receding U.S. rate rise view had spurred gold bulls
* Silver, platinum fall from 3-month highs
(Adds comment, byline, NEW YORK dateline; updates prices)
By Marcy Nicholson and Susan Fenton
NEW YORK/LONDON, Feb 5 Gold rose to a
three-month high in volatile trade on Friday, as a mixed U.S.
jobs report prompted investors to reassess the outlook for U.S.
interest rates this year, putting bullion on track for its
strongest weekly performance in more than a year.
U.S. employment gains slowed more than expected in January
as the boost to hiring from unseasonably mild weather faded, but
rising wages and an unemployment rate at an eight-year low
suggested the labor market recovery remains firm.
"The futures curve is showing that the probability of a
March (rate) hike has fallen to around 10 percent, around the
lowest levels last seen in October, but there is a greater than
50 percent probability there will be an additional hike this
year," said Suki Cooper, precious metals analyst for Standard
Chartered Bank in New York.
"This has buoyed the risk-off sentiment that has boosted
Spot gold initially rose after the jobs report but
then fell to a session low of $1,144.96 an ounce as some focused
on the rise in average hourly earnings, which may have revived
the prospect of rate hikes. By 3:11 p.m. EST (2011 GMT) it rose
to a new high at $1,165.50, up 0.8 percent and the highest since
The spot market was on track to close the week up 4.2
percent having risen for six straight days.
U.S. gold futures for April settled up 20 cents at
$1,157.70 an ounce.
"The data shows a March (interest rate) increase is not
totally out of the question, it's probably 50-50," said Robin
Bhar, an analyst at Societe Generale. "That's why gold sold off
after the report, as the dollar rose."
As a non-interest bearing asset, dollar-denominated gold
becomes less attractive if U.S. interest rates rise.
A shaky global economy has lifted buying interest in gold,
making it among the best performing assets since the start of
2016 with a gain of nearly 10 percent.
Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, rose to 22.3 million ounces on
Thursday, the highest since late October.
Other precious metals were unable to turn around from
earlier weakness, having fallen from multi-month highs.
Spot silver was down 0.1 percent at $14.86 an ounce,
after touching a three-month high at $14.96.
Platinum was down 0.5 percent at $903 an ounce, after
climbing to $911.66, a nearly three-month high. Palladium
was down 2.6 percent at $498.512, after hitting a one-month high
(Additional reporting by Manolo Serapio Jr. in Manila; editing
by Greg Mahlich, David Evans and Marguerita Choy)