Gold rises as dollar eyed, ETF unchanged
TOKYO (4 July) Gold rose on Friday and hovered above $930 per ounce, with investors keeping an eye on the dollar, which rose the previous day when bleak U.S. jobs data enhanced the dollar's safe-haven appeal and hurt bullion.
Gold tracked the dollar, inching higher as the U.S. currency trimmed earlier gains against the euro, but rises were limited as investors stayed on the sidelines and jewellery demand was weak.
"Gold is up today in a rebound from yesterday's fall but basically the market is tracking the dollar," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"The market is likely to be dead with the U.S. holiday and nothing new coming out of Europe. Investors are not in the market and jewellery is not performing well," he said.
Gold rose 0.5 percent to $933.35 per ounce, compared with New York's notional close of $928.65 on Thursday.
U.S. gold futures for August delivery rose 0.3 percent to $933.4 an ounce, compared with $931.0 on the COMEX division of the New York Mercantile Exchange.
U.S. financial markets are closed on Friday for the Independence Day holiday.
Traders said if gold prices managed to reach $950 it could give them incentives to test the market's upside.
The European Central Bank kept interest rates at 0.1 percent on Thursday, bolstering expectations they will stay there well into next year. ECB President Jean-Claude Trichet gave no sign the ECB was planning to move rates from the current record low level soon, saying they remained "appropriate".
Gold fell on Thursday as worse-than-expected U.S. jobs data dented gold's appeal as a hedge against inflation and bolstered the dollar. The dollar gained as bleak economic recovery prospects enhanced the U.S. currency's safe-haven attraction.
A rise in the dollar weakens investors' need to use bullion as a hedge against falls in the value of dollar-denominated assets and weighs on gold prices.
The dollar was up 0.1 percent against the euro and nearly flat against the yen on Friday.
