Gold was broadly steady on Tuesday, a day after touching its highest level of the year, helped by a stronger euro and by caution ahead of the release of US employment data this week. Spot gold was up 0.1 percent at $1,776.49 an ounce by 1500 GMT. It hit a peak of $1,791.20 on Monday, its highest since mid-November last year.
Trade was thin as Chinese markets remained closed for a week-long holiday and investors awaited the US government's monthly assessment of the labour market scheduled for Friday. A Reuters poll shows analysts expect 113,000 workers to have been added to non-farm payrolls in September, following August's increase of 96,000 jobs. The Federal Reserve has made job creation the objective of its $40-billion a month bond-buying programme, known as quantitative easing, which it hopes will keep credit flowing freely through the economy and borrowing costs low.
"We do have this conditional QE and it is conditional on employment growth, and the employment growth release therefore must be more important than ever. So we are waiting for that," Mitsubishi analyst Matthew Turner said. Gold priced in euros fell 0.5 percent to 1,374.16 euros an ounce, having hit a record high at 1,386.38 euros on Monday. Gold denominated in dollars hit a record $1,920.30 an ounce in September last year.
Highlighting how undecided the market is about the chances of gold breaking out much higher or lower ahead of Friday's payrolls figures is the high concentration of bets on options on shares in the SPDR Gold Trust at close to current market prices. Most open interest on options in SPDR, the world's largest exchange-traded fund backed by gold, is clustered around call options at the current price of the fund at $172.0, which equates to a spot gold price of $1,774.35. Call options give the holder the right to buy shares in the trust at a set price by a certain date, and open interest in at-the-money calls is double that of put options for the upcoming October 5 expiry.
Investment demand for gold, as measured by inflows of metal into the world's major ETFs, continued to grow, following an addition of nearly 130,000 oz of metal on Monday to a range of funds, including SPDR, the COMEX Gold Trust and ETF Securities' non-US products.
"Overall, we believe that bullion investors might take a breather here, with gold stuck below recent highs in volatile and thin trading this week," Andrey Kryuchenkov, an analyst at VTB Capital, said in a note. The firmer tone in base metals such as copper and nickel fed through to the industrial precious metals.
Silver eased by 0.3 percent to $34.55 an ounce, while palladium rose by nearly 2 percent to $649.22 an ounce, set for its biggest one-day increase since September 10. Platinum rose by 0.2 percent to $1,675.49 an ounce. The price has risen by 9 percent in the last month after a series of strikes in South Africa's platinum belt, where most of the world's supply of metal comes from.