London – Spot gold edged higher towards the $1,200 a troy ounce mark in Europe Thursday, holding firm after a week of steady gains.
The euro’s strength against the dollar fed support to gold, though caution ahead of U.S. non-farm payroll figures Friday kept volumes low and volatility subdued, and traders said the metal will likely be range-bound until the jobs data is released.
At 0953 GMT, spot gold was trading at $1,195.90 a troy ounce, up 0.17% on the day. The EUR/USD was at $1.3201, up from $1.3154 at 0000 GMT.
Gold broke above $1,200/oz Wednesday for the first time in nearly two weeks. Its recovery accelerated on China’s announcement that it will further liberalize its gold market, which raised hopes Chinese consumption will grow even faster.
While that gave gold a boost, the metal may struggle to extend its rally, analysts said. Better-than-expected jobs data Friday could rejuvenate investors’ appetite for growth assets and dim demand for safe havens like gold.
A return to the lows of July, however, is unlikely, analysts said. Physical demand from the jewelry sector has been solid, providing a floor for prices, and the long liquidation that characterized last month’s selloff has slowed.
In other precious metals, spot silver was 0.2% higher at $18.335/oz, spot platinum was down 0.2% at $1,573.50/oz and spot palladium edged 0.35% higher to $494.60/oz.
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