Gold rises to two-month high, eyes US payrolls

2 FEB, 2012, 11.22PM IST, REUTERS 

NEW YORK/LONDON: Gold rose on Thursday for a third consecutive day on a larger-than-expected fall in new US claims for unemployment benefits, but analysts said bullion could pull back due to an upcoming US jobs report. 

Bullion hit a two-month high, reversing initial losses after encouraging jobless claims data pointed to a recovery jobs market, ahead of the closely watched January US nonfarm payrolls report on Friday. 

The precious metal has risen nearly 12 percent this year, as gains accelerated after the US Federal Reserve said last week it would hold interest rates near zero until at least late 2014. 

"If you get a disappointing nonfarms tomorrow, you may see a flight into short-term market US dollar securities. That tends to create a corrective action in stocks and in precious metals," said Richard Hastings, macro strategist at investment bank Global Hunter Securities. 

Spot gold was up 0.8 percent at $1,757.70 an ounce by 11:59 a.m. (1659 GMT), having earlier peaked at $1,760.70, its loftiest since Dec. 2. US gold futures for April delivery rose $11.50 an ounce to $1,761. 

Silver was up 1.2 percent at $34.10 an ounce. U.S. employment growth probably slowed in January as temporary workers hired during the holiday shopping season were laid off, but the improving labor market trend should remain intact. A Reuters survey shows nonfarm payrolls to rise 150,000 in January after increasing 200,000 in December.