WSJ:PRECIOUS METALS: Gold Higher, But Largely In Range As Payrolls Eyed
--Spot gold at its highest level in more than a week
--Market broadly rangebound, lacking conviction for sharp move in either direction
--Investors eye payrolls, though large departure from expectations may be needed to influence gold price, analysts say
--Other precious metals also trade higher
--HSBC cuts 2011 platinum, palladium forecasts
By Rhiannon Hoyle
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Spot gold trades at its highest level in more than a week Friday, although the yellow metal is still largely within its recent wide range as many investors sit on the sidelines ahead of a key U.S. labor report later in the day.
At 0942 GMT, the spot price of gold was $1,853.55 a troy ounce--up $29, or 1.6%, on the day. The last time the metal traded at this level was Aug. 24.
The market--which has been enjoying a record-breaking bull run on the back of persistent fears over the global economy--is still around $59 off Aug. 23's all-time best of $1,912.29/oz, though.
"The metal remains broadly rangebound," said UBS analyst Edel Tully. "As gold continues to consolidate, the next leg up should have a firmer footing. But it may be some time before participants find enough conviction to push the market in one direction," she added.
Tully said while sentiment remains very positive on gold's outlook towards year-end, intraday trades are dominating the market, with flows from clients light and non-directional.
Physical demand also remains light across most regions.
The financial markets are Friday focused on the release of the monthly U.S. non-farm payrolls at 1230 GMT. Economists surveyed by Dow Jones Newswires expected total non-farm payrolls to have risen by 80,000 in August.
A disappointment in the data could stir up fears over the health of the U.S. economy and help to prop up the metal at its near-record prices. A more positive report may instead lift optimism in the markets--particularly after more upbeat economic data elsewhere this week--and subsequently damp demand for the perceived safe haven asset.
Analysts say, however, that it will likely need to be a significant surprise in the numbers for the metal to break out of its recent range.
Meanwhile, at 0942 GMT, spot silver was up 1.9% at $42.245/oz.
Focus in silver is on initial resistance at $42.43/oz, a break of which would signal extended gains towards the market's key Aug. 23 high of $44.25/oz, said Tully.
Spot platinum and palladium are also higher, trading up 0.6% at $1,854.75/oz and 0.4% at $783/oz respectively.
However, there remains some caution over the short term outlook for the industry-linked metals, particularly as platinum last week hit its highest level since July 2008.
HSBC said late Thursday that while it expects both metals to move from a modest surplus this year to a deficit in 2012--as increased auto and industrial demand are likely to outstrip mine supply--it is cutting its price forecasts for this year, in part because of the impact of the Japanese earthquake on auto demand. The two metals are used in autocatalysts.
The bank said it has cut its 2011 outlook for platinum to $1,825 a troy ounce from $1,850/oz previously, and reduced its palladium outlook to $785/oz from $825/oz.
It has, however, raised its forecasts for 2012, 2013, and the long term.
