Latest Gold Prices and the Drivers to Its Price

By Atul Prakash
LONDON, April 4 (Reuters)

- Gold drifted higher on light investor buying on Friday after trading in a narrow band ahead of U.S. jobs data that could set market direction.

The figures, due at 1230 GMT, is likely to show that the economy shed jobs in March for a third straight month.

The report will be scrutinised for clues about U.S. interest rate moves. Lower rates tend to lift gold's appeal as an alternative investment.

Gold rose as high as $907.55 an ounce and was quoted at $907.30/908.20 at 1029 GMT, against $903.40/904.20 late in New York on Thursday, when it gained more than $5.

"U.S. non-farm payrolls data are important for the market, especially after yesterday's jobless numbers," said Simon Weeks, managing director of precious metals at Bank of Nova Scotia.
"Gold still has room for more correction, but may stabilise if the dollar remains weak," he said.
The market got support from the dollar, which ticked lower versus other major currencies in technically-led trade ahead of the jobs report.

Signals for non-farm payrolls have been mixed, with a surprise gain in private sector jobs in March offset by news that first-time applications for U.S. jobless benefits rose last week to a 2-1/2 year high.

But overall, investor sentiment has improved in recent sessions, and markets are now only expecting a 25 basis point rate cut from the Federal Reserve this month.

"The U.S. labour market data leads often to the widest swings in financial markets, which would also have a strong impact on gold and other precious metals," Dresdner Kleinwort said in a daily market report.

"Gold is expected to profit from a higher-than-predicted fall of payrolls."

A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.

OIL PRICES HELP
The bullion market also got support from oil, which rose above $104 a barrel, bouncing back from losses in the previous session as the market focused back on the weakening U.S. dollar and the U.S. economic outlook.

Gold hit a two-month low of $872.90 an ounce on Tuesday on fund selling before staging a modest rebound. It was still 12 percent lower than last month's lifetime high of $1,030.80 and dealers said jewellers showed buying interest at the lows.

U.S. gold futures for June delivery GCM8 rose $1.10 to $910.70 an ounce in electronic trade.
"In the coming days, gold should trade in a wide range between $850-$950 an ounce. Whether gold will test the upper end of this range will depend on it going through and holding gains above the $ 910-$920 level," said Wolfgang Wrzesniok-Rossbach, head of sales at German precious metals trading group Heraeus.

Platinum fell to $1,980/1,990 from $1,985/1,995 an ounce, having risen more than 2 percent in New York on worries that South Africa's state utility could not meet electricity demand from precious metals miners.

South Africa's power crisis may last many years unless there is a sustained drop in electricity demand in Africa's largest economy, state power utility Eskom [ESCJ.UL] said this week.

Supply worries, caused by mining disruption in main producer South Africa, sparked speculative buying and propelled the price to record high of $2,290 an ounce on March 4.

Spot silver rose to $17.48/17.53 from $17.36/17.41 an ounce, but palladium was flat at $436/441 an ounce. (Reporting by Atul Prakash; editing by Elizabeth Piper)