* Gold hits session high after jobless data
* Gains seen capped ahead of G20 summit
(Recasts after U.S. jobs data)
By Rebekah Curtis and Pratima Desai
LONDON, Sept 24 (Reuters) - Gold rose on Thursday as the
dollar weakened after jobs data from the United States, but
traders expect gains to be capped as the market waits for news
from the Group of 20 summit talks.
Spot gold <XAU=> was bid at $1,012.70 an ounce at 1330 GMT,
from $1,007.05 late in New York on Wednesday. Prices remain
within sight of last week's 18-month high at $1,023.85 and the
March 2008 historic peak at $1,030.80.
The precious metal hit a session high of $1,018.50 an ounce
as the dollar fell against the euro after weekly data from the
United States showed an unexpected fall in new claims for
jobless benefits. [] []
"Dollar weakness is part of why we're sat where we are,"
Standard Bank analyst Walter De Wet said. "There's going to be
more dollar weakness as we head towards the end of the year. So
we see more upside in gold in the fourth quarter."
A weaker dollar makes commodities priced in the U.S.
currency cheaper for holders of other currencies.
Investors also shifted funds from the U.S. currency after
the U.S. Federal Reserve on Wednesday bolstered expectations of
low interest rates for a long time. The Fed upgraded its
assessment of the U.S. economy. []
"Gold prices continue to take their lead from currency
movements and prices gained momentum in the immediate aftermath
of the (Fed) statement as they tracked the weaker dollar,"
Barclays Capital said in a note.
Some analysts also noted that the Fed said long-term
inflation will stay subdued, which historically is negative for
gold and precious metal prices.
HEDGE AGAINST RISK
Capping gold's rise was the positive reaction in equity
markets, which took heart from the jobs data. []
However, traders said the gold market alongside other asset
markets was waiting to hear the conclusions from the G20 summit
in Pittsburgh on Thursday and Friday.
The timing for plans to unwind emergency economic support is
a key issue for investors as the G20 leaders seek ways to
nurture the recovery from the recession and build safeguards
against future catastrophes. []
Some analysts said gold was drawing support from resilient
demand in the physical market in Asia.
"Despite high prices physical demand seems to be recovering
a bit," said Eugen Weinberg, an analyst at Commerzbank.
"Together with higher investment interest, it's providing a good
picture."
India's gold purchases have picked up as the festive season
gathers pace in the world's largest consumer.
"At the moment we see signs of scarcity in some places,"
Weinberg said of the physical market in Asia. "It's surprising
that some places need to wait some weeks for their deliveries."
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,101.735
tonnes as of Sept 23, unchanged from the previous business day.
Among other precious metals, silver <XAG=> was bid at $16.83
from $16.71, platinum was at $1,316 from $1,318.5 and palladium
at $296 from $292.
(Additional reporting by Pratima Desai; editing by Keiron
Henderson)
