Gold Heads for Biggest Weekly Gain in Month Before U.S. Payrolls

Gold was poised for the best week in a month ahead of the U.S. jobs report.

The data will probably show unemployment fell to 5.7 percent last month, according to the median economist estimate from a Bloomberg survey. The Bloomberg Dollar Spot Index dropped from an all-time high as Federal Reserve of Minneapolis President Narayana Kocherlakota said raising interest rates this year would hinder a recovery in inflation.

“Unless payrolls are well out of range, it would take a lot to make people question their underlying view of the economy and gold,” Matthew Turner, an analyst at Macquarie Group Ltd. in London, said by telephone.

Gold for February delivery gained 0.4 percent to $1,213 an ounce on the Comex by 7:38 a.m. in New York, after falling for the past two days. The metal is up 2.3 percent for the week, the best performance since Dec. 12.

Bullion for immediate delivery added 0.4 percent to $1,213.94 in London trading.

In a Bloomberg survey of traders and analysts, the majority of respondents were bullish on gold prices for a sixth week, citing the prospects of more stimulus from the European Central Bank. Among 20 participants, 10 were bullish, four were bearish and six were neutral.

ECB Stimulus

ECB staff have presented policy makers with models for buying as much as 500 billion euros ($591 billion) of investment-grade assets, according to a person who attended a meeting of the Governing Council. A purchase program that size would take the ECB halfway toward its goal of boosting its balance sheet to avert a deflationary spiral in the euro area.

The diverging economic outlook between the U.S. and Europe is spurring the biggest swings for gold prices in a year as investors assess the prospect of higher American interest rates against the outlook for more global stimulus. The metal’s 60-day historical volatility is near 18.7, the highest since January 2014, according to data compiled by Bloomberg.

Silver for delivery in March fell 0.4 percent on the Comex in New York to $16.325 an ounce. The metal is still up 3.5 percent this week. Platinum and palladium were little changed on the New York Mercantile Exchange.

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