* New-year flows into commodities support gold
* Euro off lows after U.S. jobs data
* Auto sales recover in December after weak 2009
(Updates prices, adds comment)
By Jan Harvey
LONDON, Jan 6 (Reuters) - Gold prices rose to near
three-week highs in Europe on Wednesday as fresh New Year
investment flows boosted commodities, and as the dollar trimmed
earlier gains versus the euro following U.S. jobs data.
Spot gold <XAU=> was bid at $1,130.05 an ounce at 1416 GMT,
against $1,118.10 late in New York on Tuesday. U.S. gold futures
for February delivery <GCG0> on the COMEX division of the New
York Mercantile Exchange rose $12.00 to $1,130.70 an ounce.
The yellow metal is being caught up in positive sentiment
towards commodities as 2010 gets underway, analysts said.
"(This is) a commodity story really, and gold is benefiting
from that," said Simon Weeks, head of precious metals at the
Bank of Nova Scotia. "Currencies are not in favour generally."
The metal has extended gains since the release of ADP
employment figures for December in early afternoon trade, which
showed private employers shed the fewest jobs since March 2008
that month, but still disappointed some expectations. []
The news pressured the dollar from highs against the euro,
lifting gold. Weakness in the U.S. unit boosts gold's appeal as
an alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
Trading was cautious ahead of key U.S. non-farm payrolls
data for December on Friday, as investors await evidence of how
the economy is faring.
The payrolls data is expected to shape expectations for when
the Federal Reserve will start tightening its ultra-loose
monetary policy and determine the direction of the dollar.
"We have an attractive interest rate environment for gold,
and investment inflows into commodities are supporting gold
prices," said Commerzbank analyst Eugen Weinberg.
"The performance of gold will also be dependent on what's
going on in the dollar," he added.
TECHNICAL INDICATORS
From a technical perspective, gold is poised for further
gains, said analysts who study past price movements for clues as
to future trading patterns.
"With net speculative length having unwound from recent
extremes, the near-term prospects for gold have improved," said
technical analysts at Barclays Capital.
"Furthermore, with daily momentum rolling higher from
oversold conditions and price action having repeatedly held
trendline support, odds favour continued gains."
If near-term resistance is confirmed, gold could push back
towards the top end of its current range at $1,200 an ounce,
they said, close to the record high of $1,226.10 an ounce it
reached in December.
Among other precious metals, silver <XAG=> was bid at $17.96
an ounce against $17.76, platinum <XPT=> was at $1,554 an ounce
against $1,528.50 and palladium <XPD=> was at $419 against $418.
Platinum group metals traders welcomed news that U.S. auto
sales hit 11.25 million in December, the fourth month of
consecutive improvement after a weak year. Carmakers account for
more than half of platinum consumption. []
Elsewhere the world's biggest automaker, Toyota <7203.T>,
said it sold 21 percent more cars in China in 2009 than a year
earlier, while GM's China sales rose 67 percent. []
The two platinum group metals hit their highest in over a
year on Tuesday, with news that exchange-traded funds backed by
the metals will be launched in the United States lifting prices.
"Signs of recovery in the U.S. auto market and expectations
U.S. ETFs could soon begin trading continue to underpin PGM
price," said James Moore, an analyst at TheBullionDesk.com.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
