* Gold rallies to record as weak jobs data boosts QE view
* Palladium at 9-year highs on strong Chinese auto demand
* Some gold bulls brace for correction to rally
* Coming up: U.S. September nonfarm payrolls due Friday
(Recasts, updates prices to market close, new
byline/dateline, previously LONDON)
By Frank Tang
NEW YORK, Oct 6 (Reuters) - Gold rose to record highs for a
second straight day on Wednesday, after the dollar fell on a
disappointing private-sector jobs report that bolstered the
view that the Federal Reserve must soon jump start the flagging
economy.
Palladium also rallied to its highest level in over nine
years, fueled by the prospects of strong growth in auto
industry in China.
ADP's national employment report, a precursor to Friday's
all-important September Labor Department report, set off a slew
of dollar selling, showing U.S. private employer payrolls fell
unexpected by 39,000 jobs in September. Economists had been
expecting an increase of 24,000 jobs. []
James Steel, chief commodity analyst at HSBC, said that
gold has benefited from expectations of more U.S. accommodative
monetary policy and lower interest rates.
"The weak ADP report adds to the general background of
economic weakness. Monetary easing is a sign of economic
distress and it increases volatility in the paper market, which
is supportive to gold," Steel said.
Gold has hit all-time highs in eight out of the last 10
trading sessions, and has now posted the biggest seven-day gain
since early June.
It has gained from market uncertainty and widespread
expectations that the Fed might take a cue from the Bank of
Japan, which on Monday said it would buy bonds to ease monetary
policy and to weaken the yen. []
Spot gold <XAU=> scaled a record high $1,349.80 an ounce
earlier in the day. It rose 0.5 percent to $1,345.80 by 2:39
p.m. EDT (1839 GMT).
U.S. gold futures <GCZ0> settled up $7.40 at $1,347.70 an
ounce. COMEX open interest in gold rose to near last week's
record at 619,408 lots, and the exchange estimated gold volume
on Wednesday at 125,089 lots, 4.2 percent above its 30-day
average, preliminary Reuters data showed.
The dollar on Wednesday tumbled to a new 15-year low
against the yen and an eight-month trough versus the euro,
which has benefited from the European Central Bank giving no
hint that it could ease policy.
Some analysts said bullion has room to surpass its
inflation-adjusted all-time highs at above $2,200.
(Graphic: http://link.reuters.com/gup24p )
But there were market watchers who called for a near-term
correction to its record-breaking rally. []
CURRENCY VOLATILITY
Given the resilience of the euro <EUR=>, <JPY=> and Swiss
franc <CHF=> against the greenback, gold strength against the
dollar has not been replicated when it is priced in other major
currencies.
In dollar terms, gold is up about 3 percent so far this
month, while euro-priced gold <XAUEUR=> is up 1 percent,
yen-denominated gold <XAUJPY=> is up 2 percent and Swiss
franc-priced gold <XAUCHF=R> is up about 1 percent.
Constrained supply and roaring demand from auto markets in
the emerging world, and in particular China, have lifted the
price of palladium by over 45 percent this year.
Spot palladium <XPD=> rallied to its highest since July
2001, peaking at $591.50 an ounce. It was trading up 1 percent
at $580.50 in late afternoon New York trade.
Platinum <XPT=> hit $1,710.50 an ounce, the highest since
mid-May. It rose 0.9 percent to $1,709.
Spot silver <XAG=> rose to a fresh 30-year high at $23.16
an ounce. It was up 1.6 percent at $23.14 an ounce.
Additional reporting by Amanda Cooper in London
Prices at 3:11 p.m. EDT (1911 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1347.70 7.40 0.6% 22.9%
US silver <SIZ0> 23.043 0.306 0.0% 36.8%
US platinum <PLF1> 1712.00 11.30 0.7% 16.4%
US palladium <PAZ0> 589.65 11.45 2.0% 44.2%
Gold <XAU=> 1346.80 8.20 0.6% 22.8%
Silver <XAG=> 23.14 0.36 1.6% 37.4%
Platinum <XPT=> 1713.00 19.25 1.1% 16.9%
Palladium <XPD=> 586.00 10.90 1.9% 44.4%
Gold Fix <XAUFIX=> 1346.50 -0.50 0.0% 22.0%
Silver Fix <XAGFIX=> 22.92 68.00 3.1% 34.9%
Platinum Fix <XPTFIX=> 1694.00 7.00 0.4% 15.6%
Palladium Fix <XPDFIX=> 583.00 6.00 1.0% 45.0%
(Editing by Alden Bentley)
