Bill O’Neill, managing partner of New Jersey-based LOGIC Advisors, said that asset-diversification demand for gold and other precious metals by jittery investors amid shaky equities markets propelled gold’s rally.

Spot gold hit an intraday peak of $992.55, which marked the highest price since Feb. 24. It was at $989.10 an ounce at 12:07 p.m. EDT (1607 GMT), against $976.60 an ounce late in New York on Wednesday.

U.S. December gold futures were up $10.70 at $989.20 an ounce on the COMEX division of the New York Mercantile Exchange.

Fears that U.S. payrolls data may disappoint sparked a flight to quality among investors on Wednesday. The metal broke out of its previous $930-$960 range as a move through technical resistance above $960 sparked a rally.

VTB Capital analyst Andrey Kryuchenkov said gold’s immediate move had been largely technical, with the dollar offering little support and physical demand weakening as prices rose.

Gold will need to hold its current levels to build a base for further gains, he said. “If we close above $980, we will retest $990, and probably stay in this range,” he said.

The dollar index <.DXY>, which measures the U.S. currency’s performance against a basket of six major currencies, initially softened early on Thursday, boosting interest in gold as an alternative asset and driving prices to fresh highs.

The market was awaiting fresh clues on the economic outlook from Friday’s payrolls numbers. Investors were spooked after a U.S. employment report released on Wednesday showed more private sector job losses than expected.

The data will be closely watched for its impact on the dollar, and its subsequent effect on gold. The metal is set to benefit from renewed demand if the U.S. currency slips further.

STRONG INVESTMENT

“Investment demand for gold is still very strong, and that is going to help drive the price higher over time,” said Helen Henton, head of commodities at Standard Chartered. “We think it’s going to break $1,000 by Q4, mainly driven by a weakening U.S. dollar.”

Silver tracked gold higher to reach its highest level since June at $15.92 an ounce, and was at $15.84, against $15.34 on Wednesday.

It outpaced base metals such as copper, with which silver, as an industrial as well as an investment metal, often moves.

“Silver has fully participated in this (rally) and yet, while base metals have picked up a bit in the last 18 hours, they were definitely on the defensive,” said Stephen Briggs, an analyst at RBS Global Banking & Markets.

“Silver has managed to ignore that, which is interesting.”

Among other precious metals, platinum was at $1,244 an ounce against $1,229, while palladium was at $288.50 against $284.50.

Impala Platinum, the world’s second largest miner of the metal, said on Thursday some workers at its operations had returned to work after a strike, but said no wage deal had been reached with the union.

Sept 3 (Reuters)

A slide in oil prices is also undermining support for gold, analysts said.

Spot gold was at $947.85 an ounce at 1402 GMT, against $948.15 an ounce late in New York on Tuesday. U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange were up $1.30 at $948.20 an ounce.

“We are stuck in a range,” said Afshin Nabavi, head of trading at MKS Finance in Geneva. “We have to break below $944 or above $955 in order to see some interest in the market.”

“With stocks opening lower and the euro not performing that (well), gold could test the lower end of its range,” he added.

The dollar <.DXY> was steady versus a basket of six major currencies on Wednesday, with the euro declining and the yen firming, as risk appetite worsened after a weak earnings report from Morgan Stanley .

A weaker dollar supports commodities priced in the U.S. unit, such as gold, as it makes them cheaper for holders of other currencies.

Oil also slipped on Wednesday, falling below $65 a barrel, as a surprise rise in U.S. crude stocks pressured prices. U.S. stock markets opened weaker, but soon pared losses.

Standard Bank analyst Walter de Wet said $960 an ounce was proving to be a major resistance level for gold prices.”I would look towards the dollar for any major moves in gold,” he said.

“Our view for currencies is that the euro will reach $1.50 towards the end of the year. If that is going to be the case, I don’t think $960 is going to hold as a strong resistance.”

Gold last stood above $960 in early June.

SOFT DEMAND

The world’s largest gold exchange-traded fund recorded a further outflow on Tuesday. The fund, New York’s SPDR Gold Trust , has sold nearly 39 tonnes of gold in the last four weeks, equal to almost 3.5 percent of its total holdings.

Jewellery demand in India, the world’s largest gold consumer, remained slack as buyers awaited lower prices, while jewellers in Thailand cashed in their bullion on Wednesday after prices broke through $950 an ounce.

Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, said buying had been muted since gold hit five-week highs earlier this week. “Maybe people think the stock market is more attractive,” he said.

Among other precious metals, silver was at $13.52 an ounce against $13.54, platinum was at $1,164.50 an ounce from, $1,169, and palladium was at $254 against $253.50.

Impala Platinum , the world’s number two platinum miner, closed parts of its Rustenburg mine in South Africa after an accident killed nine workers.

“The National Union of Mineworkers is calling for Implats’ entire operations to be shut down and investigated,” said Fairfax analyst John Meyer in a note. “Should industrial action follow, then there could be some impact to platinum prices.”

Elsewhere in South Africa, gold producers raised their pay offer for miners on Tuesday, averting possible strike action for now, according to the mineworkers’ union.

South Africa was the world’s number three gold miner in 2008 after China and the United States, metals consultancy GFMS said.

July 22 (Reuters)

Platinum touched its highest in six months as dollar weakness over the past couple of days prompted industrial and bargain-hunting buying, lifting palladium by nearly 6 percent to its highest in over four months.

But analysts said with sales sharply down in the auto sector, the main consumer of platinum, the rally lacked fundamentals to support it and was seen short-lived.

Spot gold rose to $938.00 per ounce at 1541 GMT, up from $933.15 an ounce late in New York on Wednesday. Oil hit its highest in four months while copper surged 3 percent.

“Money keeps pushing into commodities on concerns over the money supply in the United States,” said John Meyer, head of resources at Fairfax. “Gold is a popular place to be right now.”

Gold is used as a hedge against financial uncertainty and against inflation, which is expected to soar because of the vast amounts of money being piped into the global economy by central banks and governments.

The U.S. plan to buy long-dated Treasuries further raised those inflationary concerns and have also dented the outlook for the dollar, which in turn is supportive for bullion.

But on Thursday, the dollar was up against the euro , but trade was volatile. After earlier falls, it was up 0.28 percent against a basket of major currencies

NO BOUNCE IN CONSUMPTION

The U.S. economy contracted slightly more than previously estimated in the fourth quarter, pulled down by falling consumer spending and exports, while corporate profits plunged by the biggest margin since 1994.

With this gloomy picture of the world economy and the automotive sector among the hardest hit, analysts see little change to the grim fundamentals for platinum.

“There seems to be every week an announcement of carmakers cutting production. I can’t really see any positivity on the consumption side,” David Wilson, director of metals at Societe Generale, said.

Spot platinum touched $1,159.00 an ounce, its highest since Sept. 26 and was last at $1,1149.50 an ounce versus $1,120 an ounce late in New York on Wednesday.

“The euro being stronger against the dollar has encouraged some industrial buying,” said Commerzbank trader Rory McVeigh, referring to the dollar weakness over the last couple of weeks. “Not much but enough in a very thin market to lift it.”

Platinum’s strength lifted sister metal palladium nearly 6 percent higher to $226.50 an ounce, its highest since Nov. 11. It was at $220 an ounce versus Wednesday’s $208.50 an ounce.

Spot silver firmed to $13.66 an ounce from Wednesday’s $13.45 an ounce.

The poor state of the global economy has boosted investment appetite for gold since the start of the year, with holdings in the world’s largest exchange-traded fund hitting consecutive record highs.

But analysts said the pace of the rise was beginning to slow. “Demand for investment gold is still there, but relatively slower over the last couple of days,” Wolfgang Wrzesniok-Rossbach, head of sales at Heraeus, said.

The SPDR Gold Trust , said its holdings remained at 1,124.99 tonnes on March 25, unchanged from the record hit the previous day.

March 26 (Reuters)