Gold climbed to a one-month high in Europe on Friday, extending the previous session's rise, as investors spooked by a raft of disappointing U.S. economic data turned to the metal as a safe store of value.

A dip in the dollar versus the euro, which makes dollar-priced commodities cheaper for holders of other currencies, is also supporting the metal, analysts said. Spot gold hit a high of $1,217.35 and was bid at $1,215.05 an ounce at 5:17 a.m. EDT, against $1,211.20 late in New York on Thursday. U.S. gold futures for December delivery rose 90 cents an ounce to $1,217.60.

Gold is on track to post its first consecutive two weeks of gains since late June, lifted by a spate of weak economic data from the United States, with a soft payrolls reading last Friday followed by weak jobless numbers on Thursday.

It remains within the relatively narrow range it has kept to for most of the summer, however, and will need fresh impetus to break this pattern, analysts said.

A weak non-farm payrolls print is not likely to give us a sustainable 3-4 weeks of strong inflows into gold, said RBS analyst Daniel Major. (But) a further serious deterioration in data could lead the market to price in more levels of quantitative easing.

I think you need more of a risk shock to stimulate a very strong inflow into gold that is likely to push prices back through $1,250 again.

He said he sees gold in the $1,150-1,225 range until significant new risk aversion enters the market.

All eyes are on a raft of U.S. data due later in the day, including inflation, real earnings and retail sales numbers at 8:30 a.m. EDT and a consumer sentiment reading at 10 a.m. EDT.

(The) risk focus will be tested today by a sequence of U.S. releases, with the focus most likely on retail sales, said Credit Agricole in a note.

The mood remains fickle, and it will be interesting to see later today how the dollar reacts should we get any surprises in the U.S. data.


Economic confidence in the euro zone was boosted, however, by better-than-expected growth figures from Germany, the bloc's biggest economy. European shares rose as a result, with the FTSEurofirst 300 .FTEU3 index up 0.3 percent. .EU

The data also boosted the euro, which rose 0.1 percent against the dollar. Among other commodities, oil rose 1 percent in a technical rebound after a three-day decline, while base metals largely firmed.

Elsewhere investment demand for physically backed gold exchange-traded funds picked up, with holdings of the world's largest, the SPDR Gold Trust, rising by just over 3 tonnes on Thursday, its biggest 1-day inflow since June 29.

High prices weighed on jewelry demand in key gold-buying centers, however, with traders in India reporting a dip in demand as prices rose.

I have some five orders in the $1,210-1,215 range, most of my orders are below $1,200, said one Mumbai dealer.

Among other precious metals, silver was at $18.11 an ounce versus $18.02. India's largest importer of bullion, MMTC (MMTC.BO), said its silver imports fell more than 44 percent in the year to end March as high prices hit demand.

Platinum was at $1,530.50 an ounce versus $1,525.50 and palladium at $471.18 against $467.

Gold's price rise means platinum has become increasingly good value in comparison, with the platinum-gold ratio slipping to a one-month low of 1.26 on Friday.

(Editing by James Jukwey)