Gold up ahead of payrolls data, off 3-week low
SINGAPORE (Reuters) - Gold firmed on Friday on bargain hunting and rising oil prices, having fallen to its lowest level in three weeks, but investors maybe careful about taking large positions ahead of U.S. payrolls data.
Other precious metals tracked gold's gains, with platinum holding above $2,000 as worries about supplies lingered. Tokyo platinum futures also firmed on a weaker yen.
Gold rose to $878.90/880.10 an ounce from $874.55/875.95 an ounce late in New York on Thursday, when it hit a low of $864.45 on chart-based selling -- its lowest level since May 15.
"I think for the moment, the U.S. dollar remains somewhat fragile. I think there's still a possibility for gold to get higher in the near term," said David Moore, a commodity analyst at the Commonwealth Bank of Australia in Sydney.
The euro was hardly changed at $1.5584 after earlier hitting a high of $1.5605, rebounding from Thursday's three-week low of $1.5365.
In theory, a weaker dollar lifts gold's appeal as an alternative investment while firm oil prices raise fears of inflation, boosting the metal's safe-haven appeal.
Oil extended gains to around $128 a barrel after the European Central Bank signaled it may raise interest rates, pushing down the dollar.
"If we can break $880 and stay above that, we will have a chance to visit $900," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, referring to a level last seen last week.
"I think we are still in a range of $850 to $900 for the time being," said Leung, adding that dealers awaited the payrolls data to offer direction to bullion.
The median of forecasts from analysts polled by Reuters is for the number of U.S. nonfarm payrolls to have shrunk by 58,000 last month from a contraction of 20,000 in April.
Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange added $6.8 an ounce to $882.3 an ounce.
The most active Tokyo platinum contract for April 2009 delivery on the Tokyo Commodity Exchange ended the morning session 164 yen per gram higher at 6,797 yen, mainly driven by firm oil prices and strength in the cash market.
Spot platinum rose to $2,022.00/2,042.00 ounce from $2,000.50/2,020.50 an ounce -- off a three-week low $1,946 hit last week.
"I think there are still worries about deficit. There seemed to be buying interest at below $2,000," said Leung of Lee Cheong Gold Dealers.
Platinum may spike to a record high of $2,500 an ounce this year and the market is expected to close 2008 in a significant deficit due to production shortfalls and strong metal demand, Johnson Matthey (JMAT.L) has said.
Silver edged up to $17.14/17.22 an ounce from $17.12/17.18 an ounce. Spot palladium rose to $424.00/432.00 an ounce from $421.00/429.00 an ounce.
TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Louise Heavens)
