NEW YORK/LONDON (Reuters) - Gold rose on Thursday for a third consecutive day on a larger-than-expected fall in new U.S. claims for unemployment benefits, but analysts said bullion could pull back due to an upcoming U.S. jobs report.
Bullion hit a two-month high, reversing initial losses after encouraging jobless claims data pointed to a recovery jobs market, ahead of the closely watched January U.S. nonfarm payrolls report on Friday.
The precious metal has risen nearly 12 percent this year, as gains accelerated after the U.S. Federal Reserve said last week it would hold interest rates near zero until at least late 2014.
“If you get a disappointing nonfarms tomorrow, you may see a flight into short-term market U.S. dollar securities. That tends to create a corrective action in stocks and in precious metals,” said Richard Hastings, macro strategist at investment bank Global Hunter Securities.
Spot gold was up 0.8 percent at $1,757.70 an ounce by 11:59 a.m. (1659 GMT), having earlier peaked at $1,760.70, its loftiest since December 2.
U.S. gold futures for April delivery rose $11.50 an ounce to $1,761.
Silver was up 1.2 percent at $34.10 an ounce.
U.S. employment growth probably slowed in January as temporary workers hired during the holiday shopping season were laid off, but the improving labor market trend should remain intact. A Reuters survey shows nonfarm payrolls to rise 150,000 in January after increasing 200,000 in December.
“We expect gold to reach new highs in 2012, although episodes of extreme risk aversion may trigger corrections along the way,” said Anne-Laure Tremblay, an analyst at BNP Paribas.
Tremblay said the recent rebound in risk appetite has encouraged gold buying, and anecdotal evidence suggests that bar and coin demand remains high in the U.S. and Europe.
Worries over the euro zone debt crisis had driven gold sharply higher for much of last year even as they weighed on the euro. Towards the end of the year, however, the metal behaved more like a commodity, following equities lower as risk appetite retreated.
The market largely ignored official data showing gold output in China, the biggest global producer of bullion, rose to a record 360.95 tonnes last year. Its domestic demand for gold far outstripped that figure, however.
Platinum group metals rose on news U.S. auto sales rose more than 11 percent in January, a surprisingly robust showing that marked the strongest annualized sales rate for the industry in nearly two-and-a-half years.
Spot platinum was up 0.9 percent at $1,626.49 an ounce, while spot palladium was up 1.4 percent at $704 an ounce.
Platinum has outperformed gold so far this year, rising 16 percent since end December. The metal, mostly consumed by the car industry for use in catalytic converters, has taken support from expectations that South African production could be disrupted this year by mine stoppages.