Gold advances as the dollar dips
The shiny metal inclined on Friday, bracing for the second weekly advance as the dollar slipped for the second day, thereby increasing the appeal of the metal as an alternative investment.
The previous day, gold shed $1.70 or 0.12%, while gold price was setin London at $1389.00 per ounce declining from $1390.00 during the AM fixing.
SPDR gold trust, the world's largest exchange-traded fund backed by bullion, edged up to 1,298.44 metric tons yesterday from 1,293.89 on December 1.
The US dollar fell for the third session against a basket of six major currencies, as depicted by the dollar index which plummeted to a low of 80.09 from the day's opening at 80.25, yet it may find support at 80.10 levels.
Meanwhile, the green currency is doing correction after its uptrend that started in November where it gained 6.9% against the euro as investors preferred to lock in profits.
However, the dollar movements may witness a change after the release of the awaited US non-farm payrolls.
Today's report is expected to show thatNFP increased 150 thousands in November from the 151 thousands expansion in October, while unemployment will linger at 9.6% for the fourth straight month.
Currently, there is little positive sentiment after the ECB decided to leave its emergency liquidity program to support banks, yet woes are still surrounding highly indebted nations in the euro zone.
Standard and Poor's said it may downgrade Greece's long-term sovereign credit rating of BB+ where it has put it on CreditWatch with adverse implications, claiming that the European Stability Mechanism may affect bondholders.
On the physical side, China announced that its imports of gold soared in the first 10 months of 2010 by nearly fivefold compared with the same period last year.
Goldman Sachs Group Inc. mentioned on Wednesday that it predicts gold prices to reach $1750.00 by the year 2012.
Spot gold rose to a high of $1392.50 an ounce from the day's opening at $1385.15 while oil slipped from 25-month high to a low of $87.55 a barrel from yesterday's closing at $87.92.
Among other precious metals, platinum inched up to $1710.50 from the day's opening at $1709.70, palladium soared to $758.00 from $755.00, and silver retreated to $28.65 from $28.72, as of 08:25 GMT.