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PRECIOUS-Gold climbs to five-month high on U.S. jobs, security fears
April 7, 2017 / 10:33 AM / 7 months ago

PRECIOUS-Gold climbs to five-month high on U.S. jobs, security fears

    * Fund manager fears wider fallout from U.S. strike on Syria
    * Gold close above 200-day average is key to higher levels
    * Gold on track for fourth week of gains

 (Recasts with U.S. data, comment)
    By Zandi Shabalala
    LONDON, April 7 (Reuters) - Gold hit a five-month high on
Friday after U.S. jobs data dampened expectations that the U.S.
Federal Reserve would raise interest rates and amid rising
global security tensions.
    U.S. employers added the fewest number of workers in 10
months in March, boosting gold which is most attractive to
investors in a low interest rate environment.               
    Spot gold        rose 1.2 percent to $1,265.95 an ounce by
1400 GMT after touching its highest since Nov. 10 at $1,270.46,
putting it on track for a fourth consecutive week of gains. U.S.
gold futures         climbed 1.1 percent to $1,267.60 an ounce.
    "This is the most supportive environment we have seen for
gold in some time given that there is geopolitical tension and
(a) disappointing U.S. payrolls number," Hamza Khan, head of
commodities strategy at ING, said.
    Gold was also underpinned by investors looking for safety
after the United States fired cruise missiles at a Syrian air
base, escalating tensions with Russia and Iran.
    Russia, a staunch ally of Syria, said relations between
Washington and Moscow had been seriously damaged by the strike
which was in retaliation for a deadly chemical attack on a
rebel-held area of Syria.                 
    "There is the risk that the fight over Syria will lead to a
larger confrontation in which Iran and Russia, and the U.S.,
could get involved, so it could have more serious implications
overall," Commodity Discovery Fund founder Willem Middelkoop
said.
    Gold is often used as a hedge against political and
financial uncertainty and security risks. It has benefited
alongside other assets considered safe, such as the yen and U.S.
Treasury bonds.            
    But some analysts say this support is unlikely to be
sustained.
    "When you look back at the historical record, these bids for
gold based on 'edge-of-the-world' or wars tend to be short-lived
and are followed by profit taking," Societe Generale's head of
Metals Research Robin Bhar said.
    Gold was also supported by technicals on Friday.
    "Gold has broken the 200-day moving average intraday and has
tested its upper resistance at $1,264, the Feb. 28 high,"
Jeffrey Halley, senior market analyst at OANDA, said.
    "A daily close above these levels can open a technical move
towards $1,300 with support now at $1,250."
    MKS PAMP analyst Tim Brown said if gold consolidated above
$1,260 it could be a catalyst for a push higher.
    Spot silver        rose 0.7 percent to $18.35 an ounce,
after touching $18.47, the highest since Feb. 27.
    Platinum        inched up 0.6 percent to $963 while
palladium        also added 0.2 percent to reach $805.80. 

 (Additional reporting by Nallur Sethuraman in Bengaluru and Jan
Harvey in London; editing by Susan Thomas/David Clarke/Alexander
Smith)
  

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