* Gold largely ignores personal income, PCE index
* Jobs indicators seen holding sway over price direction
* Signs of quantitative easing would give gold a lift
* Coming Up: US consumer confidence, Fed minutes due Tues.
(Recasts, updates prices and market activity)
By Frank Tang and Veronica Brown
NEW YORK/LONDON, Aug 30 (Reuters) - Gold edged higher in a
tight range on Monday, starting its fifth straight week in
positive territory, with dealers looking to key U.S. jobs
reports later this week for clarity on the economy's health.
The metal largely ignored the U.S. personal income report,
showing consumer spending rose at the strongest pace in four
months in July, offering hope consumers will be able to keep
contributing to a modest recovery.
However, the core PCE index, the Federal Reserve's favorite
inflation gauge, rose only 0.1 percent, rekindling deflation
talk, which is bearish for gold's investment appeal.
[]
Spot gold <XAU=> was at $1,236.75 by 10:55 a.m. EDT (1455
GMT) versus $1,235.70 late in New York on Friday. Trade was
fairly muted in Europe, with UK markets closed for a public
holiday. U.S. gold futures for December delivery <GCZ0> rose 20
cents to $1,238.10 an ounce.
On Friday, gold trimmed gains after Fed Chairman Ben
Bernanke said the economic recovery had weakened more than
expected and the U.S. central bank stood ready to act if
necessary to spur growth. []
Bullion dealers said the extent of the world's biggest
economy's ability to generate jobs will be a key driver for
prices, culminating in Friday's employment figures, and provide
direction for gold.
"This coming week will clearly indicate where the U.S.
stands economically -- employment is key. Only depending on the
data will gold get a clear trend," said Pradeep Unni, senior
analyst at Richcomm Global Services, referring to U.S. ADP
private sector employment figures on Wednesday and the U.S.
non-farm payrolls report on Friday.
Economists polled by Reuters estimated that unemployment
rose to 9.6 percent in August from 9.5 percent in July and that
private-sector employers added 42,000 jobs to their payrolls
after adding 71,000 in July.
Robust employment readings could make it hard for gold
prices to retest the recent two-month high at $1,244 an ounce,
but Unni said discussions about further quantitative easing
after last week's speech from U.S. Fed Chairman Ben Bernanke
would keep prices supported at the lower levels.
Barclays Capital said it was looking for the August FOMC
minutes on Tuesday to show heightened concern about the
recovery, and a lower growth forecast for 2010.
"We would not be surprised to see some discussion of
potential policy alternatives," Barcap said in a note to
clients.
QE2?
Gold prices got a leg up on Friday after comments from Ben
Bernanke raised the prospect of further quantitative easing and
the possibility of inflationary pressures. []
Further quantitative easing could potentially see gold
heading back toward its record high at $1,264.90 an ounce seen
in June, analysts said. []
Commerzbank noted that speculative financial market players
had expanded their net long positions for the fifth week in
succession in the week ended Aug. 24, with contracts rising to
their highest level since the end of June.
"This shows that gold is still very popular, both with
financial investors and longer-term oriented investors," the
bank said.
In other metals, silver <XAG=> firmed alongside gold to
$19.07 an ounce, against Friday's late price at $19.03,
bringing the metal closer to last week's two-month high of
$19.32.
Platinum <XPT=> stood at $1,528 an ounce compared with
$1,530.50 previously. Palladium <XPD=> was at $498.50 against
$501 quoted late on Friday in New York.
Prices at 10:50 a.m. EDT (1450 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCZ0> 1238.70 0.80 0.1% 13.0%
US silver <SIU0> 19.085 0.046 0.2% 13.3%
US platinum <PLV0> 1532.70 -4.30 -0.3% 4.2%
US palladium <PAU0> 500.65 -2.40 -0.5% 22.5%
Gold <XAU=> 1236.95 1.25 0.1% 12.8%
Silver <XAG=> 19.08 0.05 0.3% 13.3%
Platinum <XPT=> 1529.00 -1.50 -0.1% 4.3%
Palladium <XPD=> 497.75 -3.25 -0.6% 22.7%
Gold Fix <XAUFIX=> 1235.00 0.50 0.0% 11.9%
Silver Fix <XAGFIX=> 19.03 -8.00 -0.4% 12.0%
Platinum Fix <XPTFIX=> 1530.00 0.00 0.0% 4.4%
Palladium Fix <XPDFIX=> 503.00 3.00 0.6% 25.1%
(Additional reporting by James Regan in Sydney; Editing by
Lisa Shumaker)
