RTRS: Gold steady after sharp fall, US job data eyed
By Rujun Shen
SINGAPORE (Reuters) - Spot gold was steady on Friday, after staging its biggest daily loss in two months triggered by a dollar rebound, as the market waits for the key U.S. non-farm payrolls data due later in the day.
New U.S. jobless claims fell to a near three-month low, data showed, shoring up the U.S. dollar, but it was not strong enough to disperse speculation on more monetary easing from the Federal Reserve.
Investors are eyeing the all-important U.S. non-farm payrolls for September, which were expected to be unchanged by economists polled by Reuters.
"Consolidation is coming. We've been expecting some correction for some time," said a Hong Kong-based dealer, "People are using the non-farm payrolls data today as an excuse to sell."
"But the bullish trend is still here. We still have low interest rates, and the economy is not stable -- all the old story."
Expectations that the Fed will pour more money into the struggling economy and worries about inflationary pressure looming ahead have attracted investors to seek safe haven in gold.
Central banks are expected to be net buyers of gold in 2011 for the first time in nearly 20 years, the World gold Council said on Thursday.
Spot gold was little changed at $1,333.20 an ounce by 0303 GMT, off the peak at $1,364.6 hit on Thursday. Gold is set for a 1.2 percent rise from a week earlier, the fourth consecutive week of gains.
Gold may trade in a $1,325 and $1,340 range for one session before dropping towards $1,315 an ounce, as a sharp fall is generally followed by a mild consolidation, said Wang Tao, a Reuters market analyst.
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Adding to the bullish sentiment, AngloGold Ashanti, the world's third-largest gold miner, said it has eliminated its hedge book, and is bullish on gold prices for next year.
China's financial markets returned after a week-long holiday. The 99.99 grade gold on the Shanghai Gold Exchange rose about 1.5 percent to 286.35 yuan a gram.
Spot gold hit record highs in four out of five session when China was absent, and rose about two percent during the period.
"Gold prices in China are a bit reluctant to chase the record-high gold prices, because the yuan has been appreciating
while the dollar kept falling," said Wu Jun, an analyst at Shanghai CIFCO Futures.
"Gold priced in yuan is not as strong as gold priced in the dollar."
Wu said the fourth quarter traditionally marks strong demand for gold, in jewellery and investment. Investment demand may rise faster, as investors seek new channels after Beijing tries to squeeze speculation out of the red hot property market.
Spot silver fell as low as a two-day low of $22.31 an ounce, and was trading at $22.56, poised for a 2.3 percent weekly gain.
The Relative Strength Index on silver, or RSI, dropped to just below 70, from previously territory above 70 which is seen as a sign of overbought market.
