Gold hits eight-week high

Gold hit an eight-week high above $620 an ounce on Thursday as investors fretted that the US economy was heading for a hard landing and the dollar traded near one-month lows, analysts said.
Spot gold touched $622.90 an ounce, the highest since September 7. At 1648 GMT it was quoted at $622.70/623.70, up from $618.30/619.30 late in New York on Wednesday. Platinum jumped more than 3 percent to $1,139 an ounce, the highest since October 3. It was last at $1,139/1,144 from $1,099/1,10.
"There was a fund that came into the market this afternoon and bought large amounts of gold and platinum," a trader said. "Otherwise its mostly to do with the weaker dollar and the slippage in US data."
The run of weak US data started last week with the release of below-forecast US gross domestic product growth numbers for the third quarter and was followed by a survey showing weaker business activity in the US Midwest in October. "(Gold is) supported by concerns of slowing growth in the United States ... There's an element of flight to safety," UBS analyst Robin Bhar said.
Wednesday's survey of US manufacturing activity in October by The Institute of Supply Management showing growth at a slower pace helped gold higher and added to negative dollar sentiment.
Dollar weakness is often a signal for investors to buy gold as protection against economic or political turmoil. On Thursday it was trading just below $1.28 per euro, near the one-month low set in the previous session.
Traders are now looking to Friday's US non-farm payrolls data for October for clues to the future direction of the US economy, the dollar and gold prices.
"The jobs data will be crucial after all the bad news we've seen this week," another trader said. "If it turns out better gold could go back to shadowing oil."
For most of this year gold prices have risen or fallen with crude oil prices, which hit record highs above $78 a barrel in July. Expectations that rising energy costs would fuel price pressure boosted gold seen as an inflation hedge.
But oil prices have been dwindling below $60 since Tuesday and the link between oil and gold appears to have weakened as investors focus on the health of the US economy.
"Gold's separation from oil seems more and more final - the divorce papers can't be too far away from being filed," BNP Paribas said in a research note.
"We continue to expect the greenback to weaken over the next few months. And gold can get back above $650."
Another bullish signal is that gold prices in other currencies such as the euro are rising, suggesting real buying interest around the world and also perhaps expectations of further dollar falls, traders said.
But a major barrier for gold is a technical area of congestion between $620 and $625, an area of strong support as prices fell from the 26-year high of $730 an ounce set in May.
Silver was quoted higher at $12.57/12.64, the highest since September 8, up from $12.45/12.53 in late New York on Wednesday. Palladium bucked the trend and slipped to $321/326 from $323/$328 on Wednesday.