* Gold touches two-week high near $1,125/oz
* Gold miners target higher output in 2010
(Recasts, adds comment/detail)
By Jan Harvey
LONDON, Feb 3 (Reuters) - Gold dipped briefly on Wednesday
as the dollar firmed after news of above consensus jobs data
from the United States, the world's largest economy.
Spot gold <XAU=> hit a peak of $1,124.45, the highest since
January 20, and fell to around $1,111 an ounce after the ADP
Employer Services report boosted the dollar. []
It was bid at $1,115.45 an ounce at 1420 GMT, against
$1,113.95 late on Tuesday. U.S. gold futures for February
delivery <GCG0> were down $5.1 to $1,112.3 an ounce.
"Maybe people think the number suggests that payrolls will
be pretty good," said David Thurtell, analyst at Citigroup.
"That raises the prospect of a view that the Fed will think
things are picking up and eventually tighten policy.
Private employers in the United States cut 22,000 jobs in
January compared with expectations for a fall of 30,000. The
December figure was revised down to 61,000. []
Gold prices have reacted negatively in recent weeks to any
talk suggesting that U.S. monetary policy could be tightened.
Higher U.S. interest rates could dent the appeal of gold as a
non-interest bearing asset.
Investors often use gold as an alternative currency to the
dollar, which when it rises makes commodities more expensive for
holders of other currencies.
U.S. currency weakness and growing risk appetite earlier on
Wednesday helped boost commodity prices across the board
Traders are waiting for key U.S. non-farm payrolls data and
interest rate decisions from the European Central Bank and the
Bank of England due later this week.
"Much will depend on how the market reacts to macro data
later in the week and if risk sentiment improves across the
board," said Andrey Kryuchenkov, an analyst at VTB Capital.
"Gold is still trading alongside other metals and equity
markets... in an opposite direction to the U.S. currency."
On the investment side, holdings of the world's largest gold
exchange-traded fund, the SPDR Gold Trust <GLD>, were unchanged
for a tenth session after outflows of 21.7 tonnes in January.
CHARTISTS EYE RESISTANCE ABOVE $1,130/OZ
Analysts who study charts of past price movements as an
indicator of future moves said the metal had taken good support
from technical factors after recovering from last week's slide.
Weakness in the dollar prompted buying which pushed prices
through key resistance levels, sparking further gains.
"Spot gold found support at $1,073.85, right at the December
$1,074 key support level," technical analysts at Commerzbank
said in a weekly report released on Wednesday. "The current
bounce off this level did thus not come as a surprise to us."
They said gold was likely to meet tough resistance just
above $1,130 an ounce, but added a breach of this level could
see the metal revisit the $1,150 an ounce area.
On the supply side, Australia's third largest gold miner,
Resolute Mining <RSG.AX>, said on Wednesday it would expand gold
output by a quarter within the next three years to 500,000
ounces. Australia is the world's number four gold producer.
[]
Toronto-based Iamgold said it will lift its gold production
to about 1 million ounces in 2010 from 939,000 ounces last year,
while Russia's Highland Gold Mining <HGM.L> said it plans to
boost output by some 25 percent this year to 200-210,000 ounces.
[] []
Among other precious metals, silver <XAG=> was bid at $16.50
an ounce against $16.68. Platinum <XPT=> was bid at $1,567.50 an
ounce versus $1,576.50, while palladium <XPD=> was at $440.50
against $439.50.
U.S. auto sales rose 6 percent from a year earlier, powered
by revived purchases by rental car companies which had dropped
out of the market a year earlier due to tight credit and
concerns about a deepening slump in the economy. []
Carmakers are the biggest consumers of platinum group
metals, which are used in autocatalyst manufacturing. A slump in
car demand last year led platinum and palladium prices to
tumble.
(Additional reporting by Veronica Brown and Pratima Desai;
Editing by Keiron Henderson)
