Gold hit a three-week high early on Friday, gaining 1 percent after a dismal US nonfarm payrolls report increased the metal's safe-haven investment appeal amid worries of a slower economic recovery. A flurry of disappointing economic indicators this week including consumer spending, housing and retail sales data powered gold to its biggest gain in the last 7 weeks.
Bullion's two-percent rise this week also snapped its three-week losing streak. Gold accelerated gains and Wall Street sank in earlier trade after government data showed US private employers added fewer workers to their payrolls in July than expected, a big blow to an already weak economic recovery.
Thomas Winmill, portfolio manager of Midas Fund, said gold benefited from economic fears after data showed a double-dip recession was still possible. "The job numbers made it clear that the second quarter was weak. All these economic reports are suggesting that interest rate will be low for the time being, and that is of course very good for hard assets relative to other assets," Winmill said. Spot gold rose as high as $1,210.90 an ounce, its strongest level since July 15, and was last at $1,205.10 an ounce at 2:24 pm EDT (1824 GMT), against $1,193.10 late in New York on Thursday. US gold futures for December delivery settled up $6 at $1,205.30.
Technical support also helped gold futures after a first buy signal was triggered in four months according to the closely watched MACD analysis. The gold market also took heart from expectations of higher physical demand from China, which earlier this week vowed to develop its market and to allow more domestic banks to export and import gold to encourage more as steps to encourage more liquid trade. Silver rose in line with gold to $18.44 versus $18.31. Platinum was at $1,565.60 an ounce against $1,566.75 and palladium at $485.50 versus $492.20.
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