Gold rose on Friday ahead of a closely watched US jobs report and the metal was set to post its first weekly gain in four thanks to safe-haven bids amid political uncertainty in Greece plus robust Chinese demand.

Spot gold ticked up 0.3 per cent to $1,212.21 an ounce by 0308 GMT but it was below a three-week high of $1,222.40 reached on Tuesday.

“Safe-haven demand appears to be rising again as oil prices slump and concerns grow about Greece exiting the euro,’’ ScotiaMocatta analysts said in a note, adding that physical demand in top consumer China had also been a factor.

“We are wary that the safe-haven buying may not last if concerns over Greece subside.’’

The metal has gained 2 per cent so far this week, snapping a three-week losing streak, after global equities slumped on worries over political developments in Greece that could see it leaving the euro zone.

Equities have since recovered, prompting gold to give up some of its gains. Strong US economic data has also hurt. The latest safe-haven bids were spurred by concerns that a January 25 Greek general election would lead to a stand-off between Berlin and Athens over austerity policies imposed on Greece.

The left-wing Opposition party Syriza, which wants to cancel a chunk of Greek debt and the austerity measures imposed after an international bailout, has a narrow lead in opinion polls.

Traders were waiting for the release of the US non-farm payrolls report later in the day to gauge the strength of the world’s biggest economy.

Robust data would dent gold’s appeal as a hedge. Strong data could also prompt the Fed to increase interest rates sooner rather than later, hurting non-interest-bearing bullion.

US unemployment claims

Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell last week and job cuts declined sharply in December, suggesting faster US growth this year despite a faltering global economy.

However, minutes from the Fed’s latest policy meeting released on Wednesday indicated that the central bank was in no hurry to raise interest rates.

Elsewhere, in the physical markets, demand from China has been strong in recent weeks in the build-up to the Lunar New Year holiday in February, when gold is bought for gift-giving.

Related Topics