Gold hits fresh 2-month high ahead of nonfarm payroll report

08:40, September 03, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange resumed its rally and hit a fresh 2-month high on Thursday, as investors remained cautious before the government's nonfarm payroll report due out on Friday.

The most active gold contract for December delivery added 5.3 U. S. dollars, or 0.4 percent, to finish at 1,253.4 dollars per ounce, which is only 5 dollars away from its June record high. The price once touched 1,255.2 dollars per ounce, which is the highest level since June 28.

Although a slew of positive economic reports released on Thursday continued to tamp down the macro-economic anxiety, gold managed to hold its ground, as traders limited their big moves before the nonfarm payroll report which is considered as one of the most critical indicators to watch in order to gauge America's economic health.

Gold lost some steam earlier in the session after the National Association of Realtors announced that the number of buyers who signed contracts to purchase home surged 5.2 percent in July, after plunging to a record low in June, and another report showed that the factory orders grew by a modest 0.1 percent in July, breaking two consecutive months of decline.

The Labor Department said on Thursday that initial claims for unemployment insurance fell for a second straight week last week, but the slight decline indicated that the labor market remains sluggish.

Gold resumed its rally after the jobless report was released, and the slightly weaker dollar also helped push up gold price. Meanwhile, traders noted gold's decline on Wednesday has encouraged physical buyers in Asia to snap up bullion.

Traders also noted that the precious metal may break a fresh record on Friday, if the U.S. employment report fails to reach the expectation of economists. The trading volume of gold was quite light on Thursday.

December silver rose 27.9 cents, or 1.4 percent, to 19.672 dollars per ounce. October platinum climbed 15.8 dollars, or 1 percent, to 1,551.5 dollars per ounce.



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