* Gold backs off session peaks, still near 8-week high
* Silver at two-month highs
* Coming up: U.S. Core PCE, U.S. preliminary Q2 GDP; 1230
GMT, Aug 27
(Releads, updates with comment, refreshes prices)
By Amanda Cooper
LONDON, Aug 26 (Reuters) - Gold steadied on Thursday, having
hit its highest level in two months earlier in the day, after
U.S. unemployment data beat expectations, boosting the dollar
and other risk-linked assets such as equities.
Silver also eased back from session peaks but remained on
course for a 6 percent rise this month, which would make it its
strongest monthly increase since April.
Spot gold <XAU=> was largely steady on the day at $1,237.00
an ounce, by 1345 GMT from $1,239.00 the day before, having hit
a session peak of $1,244.00, its highest since June 30. U.S.
gold futures <GCZ0> were down $2.2 an ounce at $1,239.30.
The U.S. Labor Department said the number of people claiming
jobless benefits for the first time fell by more than expected,
which took the edge off some of the concern about the ability of
the economy to generate jobs as it recovers. []
This lifted the dollar and prompted Wall Street stocks to
extend gains, while perceived safe-haven assets such as gold and
government bonds, slid in price. [] [] []
While the data provided a modicum of relief to the economy
bulls, analysts said the overall macroeconomic backdrop remained
uncertain enough to whet investor appetite for gold.
"Investor demand is key in driving gold prices, and
short-term investors and long-term investor interest has turned
positive towards gold," said Barclays Capital analyst Suki
Cooper.
"The market is not at all-time highs in terms of investor
interest, but it's certainly turned positive and that has grown
on the back of weaker macroeconomic data," she added.
Gold struck a lifetime high of $1,264.90 in June, partly
driven by worries about a slowdown in the U.S. economy and a
cooling in several major engines of growth, such as China.
"Everybody was optimistic on the economic front back in
midsummer, 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.
RELIEF FOR STOCKS
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.
[]
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 renew 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 volatility 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.
Silver rose for a third successive session, bringing the
gain for the week to more than 6 percent, putting it on course
for its largest weekly gain since January. Spot silver <XAG=>
was bid at $19.05 an ounce against $18.93.
"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 $1,529.50 an ounce, compared with $1,527.00
an ounce late in New York on Wednesday, while palladium <XPD=>
was up over 2 percent at $502.50 an ounce, from $492.00.
(Additional reporting by Lewa Pardomuan in Singapore; Editing
by Sue Thomas)
