June 1, 2012 / 1:30 PM / 8 years ago

PRECIOUS-Gold vaults 4 pct for biggest 1-day rise in 3 years

* Weak U.S. payrolls stoke further US easing talk
    * Gold breaks ranks with riskier assets; stocks, oil slide
    * Institutional investors poised to buy more gold
    * Coming up: U.S. factory orders Monday

 (Rewrites; updates comment, market activity; adds graphic link)	
    By Frank Tang	
    NEW YORK, June 1 (Reuters) - Gold surged 4 percent on
Friday, its biggest one-day rise in more than three years, as a
surprisingly weak U.S. payrolls report added to fears about a
global economic slowdown and fuelled talk of further U.S.
monetary easing.	
    The precious metal fell in early trading, then rebounded $60
an ounce from its session low as funds piled into gold for
protection against economic uncertainty after the U.S.
unemployment rate rose for the first time in 11 months. 	
    Gold rose 3.5 percent this week, its largest gain since late
January, when investors were already fretting over Spain's poor
finances and a possible Greek exit from the euro zone, which
could send Europe's debt crisis spiral out of control.
    Bullion broke its trend of trading in sync with riskier
assets, rising on a day when Brent crude oil plummeted below
$100 a barrel and the Dow Jones industrial average fell 2
percent to wipe out this year's gains.	
    Technical buying also helped as the metal is setting up for
a bullish triple-bottom chart pattern after gold held key
support near $1,530 an ounce, which it held for most of this
    Gold's rally was reminiscent of its rise earlier this year
when the Federal Reserve said it would keep interest rates at
zero for the next several years and indicated a new stimulus
program was possible to reinvigorate economic growth.	
    "People are speculating that there will be some form of
program coordinated by central banks, which is ultimately
inflationary and gold catches a bid," said Jeffrey Sherman,
commodities portfolio manager of asset manager DoubleLine
Capital which oversees $35 billion in assets.	
    Spot gold hit a near two-week high of $1,629.41 an
ounce and was up 3.9 percent at $1,624.20 at 3:11 p.m. EDT (1911
GMT), its largest one-day rally since January 2009.	
    U.S. gold futures for August delivery settled up
$57.90 at $1,620.50, with trading volume about 50 percent above
its 30-day average, preliminary Reuters data showed.	
    Gold is forming a potential triple-bottom pattern dating
back to last September, said Rick Bensignor, chief market
strategist of Merlin Securities.	
    Gold ended May with its fourth straight monthly decline, the
longest in 12 years. Friday's rally extended gold's gain year to
date to around 4 percent.	
    "Larger institutions will commit money to gold in ways they
never had before. We are talking about CALPERS, Yale and
Harvard," said Robert Lutts, chief investment officer of Cabot
Money Management with over $500 million in client assets.	
    Prominent hedge fund managers led by John Paulson have in
recent years invested in gold as a hedge against inflation and
the loss of purchasing power in their portfolios as a result of
easy monetary policy used by central banks.      	
    Gold gained 15 percent earlier this year after the U.S.
Federal Reserve said in January it would keep interest rates
near zero until at least late 2014 and could introduce a fresh
round of asset-purchase program known as quantitative easing.	
    Among other precious metals, spot silver rose 2.4
percent at $28.44 an ounce. Spot platinum was up 2.2
percent at $1,440.24 an ounce, while spot palladium edged
up 0.2 percent at $609.99 an ounce.	
 3:11 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JUN   1620.50  57.90   3.7  1545.50 1630.00    2,791
 US Silver JUL  28.512  0.755   2.7   27.170  28.680   61,265
 US Plat JUL   1433.20  15.60   1.1  1388.80 1447.60   13,708
 US Pall JUN    612.30   0.20   0.0   605.65  614.15       43
 Gold          1624.20  61.50   3.9  1546.00 1629.41         
 Silver         28.440  0.680   2.4   27.240  28.690
 Platinum      1440.24  30.49   2.2  1392.60 1442.99
 Palladium      609.99   1.51   0.2   599.85  614.25
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        290,174   201,302   192,594     24.91    1.65
 US Silver       69,169    52,639    52,139     33.62   -0.82
 US Platinum     15,270     7,262     7,972        18    0.00
 US Palladium     4,555     5,752     4,505                  
 (Additional reporting by Jan Harvey in London; editing by David
Gregorio and Andre Grenon)
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