(Updates with quotes, prices)
By Atul Prakash
LONDON, March 5 (Reuters) - Gold rose more than 1 percent on
Wednesday after falling earlier in the day, as the dollar
changed course to weaken against the euro and oil prices jumped.
Silver gained more than 2 percent to trade above $20 an
ounce, platinum pared losses after slipping 3 percent to a low
of $2,150, while palladium rose after slipping 4 percent.
Spot gold <XAU=> fell as low as $959.45 an ounce before
hitting a high of $975.40. It was at $974.90/975.80 at 1450 GMT,
against $963.20/964.00 in New York late on Tuesday, when it fell
2 percent with a drop in oil.
Analysts said the long-term bull trend remained intact and
the metal had $1,000 an ounce in its sights, as oil hovered near
an all-time high and the dollar's appeal was declining on
expectations of more U.S. interest rate cuts.
"The next move in gold really depends on what happens to the
U.S. non-farm payrolls data. If it's much weaker than expected,
the dollar would probably weaken and it would be definitely good
for gold," said Walter De Wet, analyst at Standard Bank.
"Longer term, gold is going to go up. The $1,000 level is a
strong resistance level and the metal might make one or two
attempts before it breaks it," he said.
The dollar fell against the euro after a report showing
unexpected job losses in the U.S. private sector raised fears
that slower growth was starting to impact the labour market.
U.S. private employers cut 23,000 jobs in February,
according to the independent ADP Employer Services, compared to
market expectations for 20,000 new jobs.
This was the biggest drop since April 2003. The report also
raised fears that the government's non-farm payrolls data on
Friday might be weak.
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
Oil firmed above $101 after OPEC left its output unchanged,
as expected, despite U.S. calls for action to reduce prices.
A higher euro/dollar helped.
"We have to keep an eye on oil and the euro/dollar. As soon
as the euro moves up above $1.50, the market sees fresh
speculative buying. We have a chance to see the $1,000-an-ounce
level," said Michael Kempinski, senior trader at Commerzbank.
"Gold still looks very good on charts."
The euro <EUR=> was quoted at $1.5229, up from $1.5208 in
New York late on Tuesday.
JEWELLERS ACTIVE
In the physical sector, gold's fall from record highs
spurred buying by jewellers in Asia, while the marriage season
in India, the world's largest bullion consumer, helped the local
market. []
U.S. gold futures for April delivery <GCJ8> was up $10.5 at
$976.80 an ounce, against a record high of $992.00 on Monday.
Platinum <XPT=> fell as low as $2,150 before rising to
$2,180/2,190 an ounce, against $2,220/2,230 late on Tuesday,
when it hit a record of $2,290 on persistent supply fears after
a power crisis disrupted mining in top producer South Africa.
"Ongoing supply issues and potential for further mine
disruption in South Africa means that platinum prices could see
some immunity to more general market weakness," Fairfax
investment bank said in a daily market note.
A crippling power crisis forced a shutdown of the crucial
mining sector for five days in January and since then mines have
been operating with only 90 percent of their usual power,
raising fears of massive job losses in the industry.
South Africa power utility Eskom said applications for new
power connections for construction projects requiring more than
100 kilo volt-ampere would take up to six months to approve.
Palladium <XPD=> fell to a low of $519 an ounce and was last
quoted at $529/534, against $545/550 in New York on Tuesday,
when it rose to a 6-1/2-year high of $590. Silver <XAG=> rose to
$20.18/20.23 an ounce from $19.71/19.76 -- versus Monday's
27-year high at $20.60.
(Reporting by Atul Prakash; editing by Peter Blackburn)
