September 1, 2017 / 10:26 AM / 3 years ago

PRECIOUS-Gold at near 10-month high after U.S. jobs growth slows

    * U.S. jobs data disappoints
    * N. Korea, U.S. turmoil supports safe-haven demand
    * Palladium surges to highest since 2001

 (Updates prices; adds palladium details, comments, second
byline, NEW YORK dateline)
    By Marcy Nicholson and Peter Hobson
    NEW YORK/LONDON, Sept 1 (Reuters) - Gold rose to the highest
in nearly 10 months on Friday after U.S. job growth slowed more
than expected in August, but pared gains when investors judged
that the figures were unlikely to change the outlook for U.S.
interest rate rises. 
    Spot palladium prices made their biggest one-day surge since
March 2016 and reached the highest price in 16-1/2 years after
some U.S. automakers reported better-than-expected August sales
and as demand was expected from Houston to replace flood-damaged
vehicles after Hurricane Harvey.             
    Spot gold        was up 0.2 percent at $1,324.46 an ounce by
1:59 p.m. EDT (1759 GMT) after reaching $1,328.80, the highest
since Nov. 9. It was set for a weekly gain of 2.6 percent. 
    U.S. gold futures         settled up 0.6 percent at
$1,330.40. On Monday, tThe U.S. metals futures markets will shut
early for the U.S. Labor Day holiday.             
    Data showed U.S. job growth slowed more than expected, but
the pace of gains should be more than enough for the Federal
Reserve to announce a plan to start trimming a massive bond
portfolio accumulated.                                       
    The dollar index        and bond yields initially weakened
sharply following the jobs data but turned higher.       
    "Investors have been looking for a hedge against many ...
risks," said Rob Haworth, senior investment strategist at U.S.
Bank Wealth Management.
    "Pick your poison: trade, geopolitics, thermonuclear, debt
    Gold is still likely to rise further after prices increased
by 4.1 percent in August, the biggest monthly gain since
January, said Mitsubishi analyst Jonathan Butler.
    "The technical uptrend is well established, there is
continuing uncertainty over North Korea's nuclear ambitions and
an imminent wrangle between Congress and the White House over
the debt ceiling that must be solved by late September to avoid
technical default," he said.                           
    Adding to geopolitical concerns, the United States on
Thursday told Russia to close a consulate, worsening a
diplomatic spat.             
    Spot palladium        was 5.2 percent higher at $982 an
ounce, the highest since February 2001. 
    "Palladium stormed 5 percent higher as speculators bought
aggressively anticipating heavy demand to replace vehicles
destroyed by Hurricane Harvey in a thin pre-holiday market in
New York," said Tai Wong, director of base and precious metals
trading for BMO Capital Markets in New York.
    "The platinum/palladium ratio at 1.0250 is the closest it
has been to par in 16 years." 
    Platinum        was up 1.1 percent to $1,006, after rising
to a six-month high at $1,009.
    Silver        was up 0.6 percent at $17.67 an ounce, after
rising to the highest since early June at $17.75. 

 (Additional reporting by Arpan Varghese in Bengaluru; Editing
by Pritha Sarkar and Alistair Bell)
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