LONDON - Gold firmed in a tight range, starting its fifth straight week in positive territory, with dealers looking to key US jobs reports for clarity on its economic health.
Spot gold was quoted at $US1,236.65 by 1911 AEST versus $US1,235.70 late in New York on Friday. Trade was fairly muted in Europe, with UK markets closed for a public holiday.
US gold futures for December delivery rose 70 cents to $US1,238.60 an ounce against $US1,237.90 on Friday.
Bullion dealers said the extent of the world's biggest economy's ability to generate jobs would be a key driver for prices, culminating in Friday's employment figures, and provide direction for gold.
"This coming week will clearly indicate where the US stands economically -- employment is key. Only depending on the data will gold get a clear trend," Richcomm Global Services senior analyst Pradeep Unni said, referring to data including US ADP private sector employment figures on Wednesday and the US non-farm payrolls report on Friday.
Economists polled by Reuters estimated that unemployment rose to 9.6 per cent in August from 9.5 per cent in July and that private-sector employers added 42,000 jobs to their payrolls after adding 71,000 in July.
US non-farm payrolls as a whole are estimated to have shed 99,000 jobs in August, but this was a function of the federal government releasing temporary census workers.
Robust employment readings could make it hard for gold prices to retest the recent two-month high at $US1,244.00 an ounce, but Unni said discussions about further quantitative easing after last week's speech from US Fed chairman Ben Bernanke would keep prices supported at the lower levels.
Projected gains in July US personal income later on Monday could also keep a lid on bullion's upside as an improving outlook typically drives more investors away from safe harbours like gold.
Consensus figures point to a 0.3 per cent increase in the July figure for personal income, Thomson Reuters data shows.
Barclays Capital said it was looking for the August FOMC minutes on Tuesday to show heightened concern about the recovery, and a lower growth forecast for 2010.
"We would not be surprised to see some discussion of potential policy alternatives," Barcap said in a note to clients.
QE2?
Gold prices got a leg up on Friday after comments from Ben Bernanke raised the prospect of further quantitative easing and the possibility of inflationary pressures.
Further quantitative easing could potentially see gold heading back towards its record high at $US1,264.90 an ounce seen in June, analysts said.
On the investment front, the world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings stood at 1,298.556 tonnes versus 1,297.948 tonnes on Aug. 26.
"A new demand group is emerging with the ETFs in India, the world's largest gold consumer," Commerzbank analysts said. "The country's largest ETF provider expects inflows of 100 to 200 tonnes in the next three years, which should give additional support to gold prices."
Unni also said that gold should see seasonal demand kick in over the next few months, which would support prices on any dips.
In other metals, silver firmed alongside gold to $US19.08 an ounce, against Friday's late price at $US19.03, bringing the metal closer to last week's two-month high of $US19.32.
Platinum stood at $US1,531.00 an ounce compared with $US1,530.50 previously. Palladium was fetching $US501.93 against $US501.00 quoted late on Friday in New York.
