* U.S. open interest at three-month low
* Gold priced in euros rises but near oversold territory
* ETF at record, Indian physical bullion demand strong
* Coming up: U.S. November non-farm payrolls Friday
(Adds market details, updates prices)
By Frank Tang
NEW YORK, Dec 6 Gold rose on Thursday on
short-covering before a U.S. employment report and after
comments from the European Central Bank chief boosted
expectations of an interest rate cut.
Bullion buying took off after ECB President Mario Draghi
said the euro zone economy was likely to shrink next year as it
has in 2012, and downside risks to growth prevailed for the
region battered by a prolonged debt crisis.
The metal rebounded from the previous session's one-month
low but gains faced resistance from technical selling around its
100-day moving average near $1,700 an ounce. Sharp losses in
euro and crude futures also limited gold's gains.
Funds have been liquidating of late as open interest in U.S.
gold futures, a gauge of market activity, fell to a three-month
"The loss of all of this open interest signals the
institutions are moving to the sidelines until after an
announcement on the 'fiscal cliff'," said George Gero, vice
president of RBC Capital Markets, referring to talks aimed at
resolving a potential U.S. budget crisis at the year-end.
Spot gold was up 0.3 percent at $1,699.05 an ounce by
3:34 p.m. (2034 GMT).
U.S. COMEX gold futures for February delivery settled
up $8 an ounce at $1,701.80, with trading volume around 25
percent below its 30-day average, preliminary Reuters data
The metal also tracked gains in U.S. equities after data
showed the number of Americans filing new claims for
unemployment benefits last week fell back to the range before
"There is a preference for riskier assets and
interest-bearing assets," said Andrew Cole, fund manager with
Baring Asset Management.
Despite Thursday's gain, gold's 14-day relative strength
index (RSI) was at 39, near an area below 30 which analysts
Gold priced in euros rose over 1 percent, its
biggest daily rise in a month, boosted by the euro's sharp drop
on Draghi's comments and the metal's gains.
PAYROLLS, BUDGET TALKS IN FOCUS
Gold investors are awaiting direction from U.S. non-farm
payrolls data for November on Friday and next week's Federal
Reserve policy meeting, as well as clearer signals on how the
United States will deal with negotiations aimed at preventing
$600 billion of tax increases and federal spending cuts.
The metal has been under pressure due to uncertainty over
the budgetary measures, which could push the world's biggest
economy back into recession.
Investors' appetite for physical gold and physically backed
investment products remained sharp, with holdings of the largest
gold exchange-traded fund, SPDR Gold Trust, at a record
Demand in India, one of the world's biggest buyers of gold,
was also firm as the rupee climbed.
Among other precious metals, silver was up 0.4
percent at $32.98 an ounce. Platinum rose 1.1 percent to
$1,593.49 an ounce, while palladium climbed 1.5 percent
to $692.50 an ounce.
3:34 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold FEB 1701.80 8.00 0.5 1687.10 1704.80 133,934
US Silver MAR 33.114 0.157 0.5 32.600 33.330 37,562
US Plat JAN 1600.70 16.50 1.0 1573.40 1601.90 7,830
US Pall MAR 697.05 9.60 1.4 683.00 700.80 4,655
Gold 1699.05 5.64 0.3 1686.73 1702.86
Silver 32.980 0.140 0.4 32.570 33.230
Platinum 1593.49 17.49 1.1 1576.50 1598.50
Palladium 692.50 10.00 1.5 684.50 696.50
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 138,947 186,372 174,754 13.42 0.34
US Silver 40,916 59,041 52,743 21.69 -1.12
US Platinum 8,724 8,402 8,792 16.45 0.12
US Palladium 4,657 6,061 4,747
(Additional reporting by Jan Harvey and David Brough in London;
Editing by Dale Hudson and Kenneth Barry)