* Gold up on dollar slump, non-farm payrolls disappoint
* Weak jobs data hardens quantitative easing, help gold
* Bullion up over 3 pct, biggest weekly gain since April
* Coming up: ISM manufacturing semiannual forecast on Tue.
(Recasts, adds comments, updates prices to market close,
changes byline and dateline, previously LONDON)
By Frank Tang
NEW YORK, Dec 3 (Reuters) - Gold rose almost 2 percent on
Friday, rising above $1,400 an ounce as the dollar tumbled
after disappointing jobs data cast doubt on the strength of the
U.S. economic recovery.
Bullion was up more than 3 percent this week, its biggest
gain since April, pushed higher by lingering fears about a
sprawling European debt crisis and fund buying in commodities
across the board.
The Reuters/Jefferies CRB index <.CRB>, a gauge of
commodities performance, rose 5 percent, its biggest gain since
October 2009.
Gold breached above $1,400 for the first time since
November after data showed U.S. nonfarm payrolls barely grew in
November and the jobless rate unexpectedly hit a seven-month
high. []
"The employment data today makes it more likely that the
U.S. Congress is going to have to extend unemployment insurance
and the tax cuts. The market sees that as more deficits
spending, creating a more positive atmosphere for gold because
the dollar is going down on it," said Tom Pawlicki, precious
metals and energy analyst at MF Global.
Pawlicki said the job report hardened the view that the
Federal Reserve would stick to or even extend its $600 billion
bond-buyback program to stimulate growth.
The White House said the November unemployment data
underscored the importance of extending tax cuts for
middle-class Americans and unemployment insurance.
Economists said the weak jobs report could give fresh
impetus to get a deal done, as expiry of the tax cuts without
offsetting stimulus elsewhere could deal a hard blow to the
economy.
Spot gold <XAU=> rose 1.7 percent to $1,408.19 an ounce at
3:01 p.m. EDT (2001 GMT), its biggest one-day rise since Nov.
4.
U.S. gold futures for December delivery <GCZ0> settled up
$16.90 an ounce at $1,406.2.
Silver tracked gold higher, trading up 2.7 percent at
$29.29 an ounce
COMEX gold and silver volume was sharply lower than their
30-day average, as investors have completed contract rollover
prior to December's first notice day on Tuesday.
Earlier this week, gold seemed to struggle to gain upward
momentum for a new test of its record high at $1,424.10 an
ounce set on Nov. 9, in spite of lingering worries that
Europe's debt crisis could spread to other countries following
bailouts of Ireland and Greece.
But weak U.S. data has given new momentum to gold.
"It indicates we are not out of the woods yet in terms of
what direction the U.S. economy is going to be heading," said
Saxo Bank analyst Ole Hansen.
"We saw a lift in gold and that probably stems from the
continued recovery of the euro against the dollar," he said.
The dollar dropped across the board after the bleak job
picture, although persistent euro zone debt problems may limit
losses, particularly against the euro. [] [] []
The metal has been asserting its inverse correlation with
the dollar, after earlier this week moving in tandem with the
greenback as investors bought both the metal and the U.S.
currency as safe havens.
EURO ZONE CONCERNS LINGER
Gold is also supported by lingering concerns that the euro
zone debt crisis could spread to Spain and Portugal.
"The underlying issues haven't really been resolved and
there's a general view that one way of resolving them is for
the ECB to have a more accommodating monetary policy which is
gold supportive," said Mitsubishi analyst Matthew Turner.
Gold does well in a low interest environment, as this cuts
the opportunity cost of holding non-interest bearing assets.
Respected precious metals consultancy GFMS forecast silver
would average around $30 an ounce in 2011, peaking at $35,
while gold would peak at some $1,600-1,650 an ounce, and
average $1,400.
Earlier this week, Goldman Sachs said gold will climb to
$1,690 an ounce in the next 12 months as the resumption of
quantitative easing will keep U.S. real interest rates low.
[]
Platinum rose 0.8 percent to $1,721.49, and palladium
gained 0.7 percent to $764.47, off a 9-year high of $776.22.
Prices at 3:18 p.m. EST (2018 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCG1> 1406.20 16.90 1.2% 28.3%
US silver <SIH1> 29.271 0.699 0.0% 73.8%
US platinum <PLF1> 1728.50 15.40 0.9% 17.5%
US palladium <PAH1> 770.10 6.40 0.8% 88.4%
Gold <XAU=> 1408.05 23.30 1.7% 28.4%
Silver <XAG=> 29.25 0.74 2.6% 73.7%
Platinum <XPT=> 1721.74 13.25 0.8% 17.5%
Palladium <XPD=> 764.47 5.25 0.7% 88.5%
Gold Fix <XAUFIX=> 1403.50 11.75 0.8% 27.1%
Silver Fix <XAGFIX=> 28.74 24.00 0.8% 69.2%
Platinum Fix <XPTFIX=> 1718.00 3.00 0.2% 17.2%
Palladium Fix <XPDFIX=> 758.00 5.00 0.7% 88.6%
(Additional reporting by Elizabeth Fullerton and Jan Harvey in
London; Editing by Kieran Murray)
