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PRECIOUS-Gold firms ahead of jobs data but eyes worst week this year
October 7, 2016 / 9:56 AM / a year ago

PRECIOUS-Gold firms ahead of jobs data but eyes worst week this year

* Gold pauses after slide to 4-month low, awaits payrolls
    * Gold in sterling hits three-month high as pound crashes
    * GRAPHIC-Gold vs currencies: link.reuters.com/cyv95s
    * Silver set for worst week since April 2013, down 10 pct

 (Updates prices)
    By Jan Harvey
    LONDON, Oct 7 (Reuters) - Gold edged higher on Friday ahead
of U.S. non-farm payrolls data but remained on track to slide
nearly 5 percent this week after a jump in the dollar pushed it
through major price chart levels. 
    A crash in the pound sent gold priced in sterling to a
three-month high.
    Spot gold was at $1,255.91 an ounce at 1135 GMT, up
0.1 percent, while U.S. gold futures for December
delivery were up $5.30 at $1,258.30. 
    Gold has fallen for the last eight sessions, hitting its
lowest since early June on Thursday.
    The dollar index posted its biggest weekly rise since
November this week after upbeat U.S. jobs and manufacturing data
reinforced expectations the Federal Reserve would lift interest
rates this year.
     That pressured gold, and its downward move accelerated as
it slipped through $1,300 an ounce, which has underpinned prices
since Britain's vote to leave the European Union in June.
    "The stabilisation we see now is because players don't want
to push it further ahead of the U.S. employment report,"
Georgette Boele, an analyst at ABN Amro, told the Reuters Global
Gold Forum. "If it comes in strong and Fed speakers are hawkish
the move will be restarted."
    Gold is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar, in which it is priced.
    Traders waited for U.S. non-farm payrolls data for September
at 1230 GMT for clues on the next direction of trade. 
    The employment report is expected to show payrolls rose by
175,000 jobs last month, according to economists polled by
Reuters. A strong report would increase bets that the U.S.
central bank is gearing up to raise interest rates in December.
    "Any number above 190,000 will likely be bearish for gold as
it should send the dollar up and almost certainly usher in a
year-end rate hike," INTL FCStone said in a note.
    Outperforming spot, sterling-denominated gold was
at 1,018.65 pounds an ounce, up 2.4 percent, having earlier
peaked at 1,059.06 pounds, its highest since mid July.
    The pound plunged to a 31-year low in a matter of minutes
overnight in what traders said was a "flash crash" driven by
computer-initiated sell orders, against a backdrop of growing
anxiety that Britain will undergo a "hard" exit from the
European Union. 
    Silver was up 0.2 percent at $17.32 an ounce. It is
down nearly 10 percent this week, its biggest weekly drop since
April 2013. Platinum was up 0.2 percent at $965, while
palladium was 0.1 percent lower at $666.85.

    
 (Additional reporting by Swati Verma and Nallur Sethuraman in
Bengaluru; Editing by William Hardy)

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