* 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 (Reuters) - 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 gold.
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 ounce.
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 well.”
“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. elections looming.”
Gold importers remained cautious, as prices continued to be supported by a weaker rupee and firm overseas markets ahead of festivals.
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 their parents.
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.