Gold, little changed in London, may gain as rising unemployment in the US increases concern the global recession will continue, boosting demand for the metal as an alternative investment.
A report on Thursday showed US employers cut more jobs than forecast in June and the jobless rate rose to the highest in almost 26 years. Asian and most European equities declined today after the MCSI World Index of shares dropped the most in 10 days yesterday.
``The US jobs numbers are bullish for the gold market,'' Bernard Sin, the head of currency and metals trading at Swiss refiner MKS Finance SA, said by telephone from Geneva. ``Indian buyers are starting to buy gold at current levels, which is also encouraging for the metal.''
Bullion for immediate delivery gained $US2.39, or 0.3 per cent, to $US932.18 an ounce in London. August gold futures added 0.1 per cent to $US932 an ounce on the New York Mercantile Exchange's Comex division. Most US markets are closed today for the Independence Day holiday.
The metal rose to $US932.50 in the morning ``fixing'' in London, used by some mining companies to sell production, from $US929.50 at yesterday's afternoon fixing. Spot prices are up 5.7 per cent this year, heading for a ninth annual gain.
Still, bullion is heading for a fourth weekly decline in five. The metal has slipped 0.8 per cent this week as the US Dollar Index, a six-currency measure of the greenback's value, has added 0.5 per cent and crude-oil futures have slid 4.5 per cent. Gold's gains may have been capped today as the dollar index rose as much as 0.4 per cent. Some investors use oil prices as an inflation guide.
`Very high fear'
``Gold has been pricing in a very high fear of inflation, and with the US unemployment data, the market should move toward a view that there'll be no inflation for the next few years,'' said Jesper Dannesboe, a senior commodity strategist at Societe Generale in London. ``Crude oil has gone down, and the (US) dollar could go higher.''
Investment in the SPDR Gold Trust, the biggest ETF backed by bullion, was unchanged for a second day at 1,120.55 metric tons yesterday, the company's Web site showed.
``For almost two weeks, gold hasn't been able to break and hold below'' $US925 to $US926 an ounce and ``hasn't also been able to break higher above $US943-$US947,'' Pradeep Unni, a Richcomm Global Services analyst in Dubai.
Silver for immediate delivery in London gained 0.2 per cent to $US13.42 an ounce. Platinum added 0.2 per cent to $US1,188.50 an ounce, and palladium was 1.2 per cent lower at $US248.98 an ounce.
