* Gold rises to 8-week high, physical market thin
* Silver at two-month highs
* Coming Up: U.S. initial jobless claims; 1230 GMT
(Updates throughout with comment, prices; changes dateline,
previous SINGAPORE)
By Amanda Cooper
LONDON, Aug 26 (Reuters) - Gold rose for a third day on
Thursday to hold around eight-week highs, driven by a resurgence
in investor concern over the outlook for global growth that has
undermined global equities and boosted safe-haven assets.
Silver has also risen to its highest in about two months and
is on course for a near 6-percent rise this month, which would
make it its strongest monthly increase since April.
Spot gold <XAU=> rose to $1,241.20 an ounce by 0920 GMT from
$1,239.00 the day before, having hit a session peak of
$1,243.30, its highest since early July. Gold for December
delivery on COMEX <GCZ0> was up $1.80 an ounce at $1,243.00.
Gold struck a lifetime high around $1,264 in June, partly
driven by worries about a slowdown in the U.S. economy.
"Everybody was optimistic on the economic front back in
mid-summer and hence, gold was backing off as people were
putting risk back on the books and unwinding safe-haven
positions," said Simon Weeks, head of precious metals at Scotia
Mocatta.
"That optimism has disappeared nearly as fast as it arrived.
With a string of bad numbers out of the States and the Dow
struggling to hold 10,000, the currency markets have become
increasingly unnerved by it all," he said.
World stocks bounced off seven-week lows on Thursday and the
Japanese yen weakened in another burst of risk-on/risk-off
trading that has dominated financial markets this year.
[]
JOBLESS DATA
Investors will be looking for an improvement in the number
of people filing for unemployment benefit for the first time
later today, after last week's initial jobless claims data
showed claims hit a nine-month high.
A series of disappointing U.S. economic data this month that
started with a surprisingly large fall in July job growth has
prompted the Federal Reserve to rewew its drive to keep interest
rates low, thereby creating a favourable environment for gold.
The dollar, which has acted in recent weeks as a refuge
against volatilty in other currencies, has come under pressure
as cracks in the economic recovery have materialised.
Gold usually moves inversely to the dollar as weakness in
the U.S. currency makes bullion cheaper for non-U.S. buyers.
"Gold is reluctant to weaken considerably and looks for
every opportunity to strengthen. I still don't see it really
moving substantially lower in the short term, while the ETF
investors are still on board," said Darren Heathcote, head of
trading at Investec Australia in Sydney.
"Whilst we are getting any negative data, you can expect
gold to benefit."
Holdings of the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust <GLD>, jumped nearly 13 tonnes last
week, its biggest one-week climb since early June. []
Silver rose for a third successive session, bringing the
gain for the week to 5.6 percent, putting it on course for its
largest weekly gain in nearly five months.
"Much of silver's recent rally is due to expanding investor
interest, as registered by rising CME volumes and
options-related buying - but there's also been a notable
increase in ETF buying," said Edel Tully, UBS precious metals
strategist, in a daily report.
"We are positive towards silver this year, and see potential
for it to gain as the 'poor man's gold', a cheap alternative to
the primary safe-haven asset," she added.
The gold/silver ratio -- the number of ounces of silver
needed to buy one ounce of gold -- fell to its lowest since the
start of the month on Thursday.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of the gold/silver ratio:
http://graphics.thomsonreuters.com/gfx/AC_20102608101735.jpg
For a chart of silver's outperformance relative to the other
major precious metals:
http://graphics.thomsonreuters.com/gfx/AC_20102608084225.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The platinum group metals were also up on the day. Platinum
<XPT=> was last at $1,531.45 an ounce, compared with $1,527.00
an ounce late in New York on Wednesday, while palladium <XPD=>
was up over 1.5 percent at $500.00 an ounce, from $492.00.
(Additional reporting by Lewa Pardomuan in Singapore;
editing by Sue Thomas)
