* Stocks edge up as Wall Street reopens after two days
* Traders focus on Friday's U.S. non-farm payrolls
* Gold importers in India await lower prices
By David Brough and Jan Harvey
LONDON, Oct 31 Gold rose nearly 1 percent to its
highest in a week on Wednesday as U.S. stock markets held firm
after re-opening following Hurricane Sandy, but gold ended lower
for the month, snapping four straight monthly gains.
Prices broke back above $1,720 an ounce as U.S. traders
returned to their screens after a two-day closure following a
storm that battered the U.S. east coast.
Spot gold was at $1,720.90 at 1842 GMT, up 0.7
percent, while U.S. gold futures for December closed up
$7 at $1,719.10. The metal dropped 2.8 percent during October,
its first one-month decline since May.
On Oct. 5, Gold hit an 11-month high above $1,795, after the
Federal Reserve unveiled new measures to boost the U.S. economy.
Stimulus measures heighten inflation concerns while maintaining
downward pressure on interest rates, both positive factors for
However gold retreated in line with other nominally
higher-risk assets such as stocks and other commodities later in
the month, as euphoria from the move petered out, with
confidence in its rally dented by a failure to break $1,800 an
Gold "has been forming a good base over the last couple of
days," Saxo Bank vice president Ole Hansen said. "Japan
quantitative easing yesterday returned the focus to monetary
stimulus, forward-looking inflation has been creeping higher as
"It looks like speculators are dipping their toes in again,
but probably only to do a bit of window dressing ahead of month
end," he added. "Do not expect any major fireworks unless we
close above 1730 or until after non-farm payrolls on Friday."
As the extent of the monetary stimulus 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.
Mitsui Precious Metals analyst David Jollie said gold was
likely to remain in a narrow range in the near term due to
uncertainty before next week's U.S. election.
"People are not keen to add risk to their portfolios ahead
of that," Jollie said.
UBS said in a daily market report that the recent
consolidation of gold prices above $1,700 an ounce was a healthy
exercise in preparation for the next leg higher.
"There are those who are still looking for another dip,
perhaps one that offers an opportunity to jump in sub-$1700,
between now and year-end," it said.
"The clear downtrend from earlier in the month has now been
replaced by this consolidation phase. But the possibility of
another attempt on the downside certainly cannot be ruled out,
especially with U.S. nonfarm payrolls coming up and the U.S.
Gold importers remained cautious, as prices continued to be
supported by a weaker rupee and firm overseas markets ahead of
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
Spot platinum was up 1.2 percent at $1,566.74 an
ounce and palladium was up 1.9 percent at $605 an ounce.
Silver was up 1.3 percent at $32.23 an ounce.
Thursday sees the release of U.S. manufacturing data,
strength in which would be likely to benefit industrial precious
metals, Briesemann at Commerzbank said.