March 08, 2008	Saturday	Safar 29, 1429

LONDON, March 7: Gold drifted higher towards the key $1,000 level on Friday after slipping from record highs in the previous session, with investors awaiting U.S. jobs data for near-term direction.

A record low dollar against the euro and strong oil prices were seen underpinning gold prices, but platinum and palladium fell sharply on expectations that South African power problems could improve in the coming weeks.

Gold rose as high as $984.70 an ounce and was quoted at $980.15/980.90 against $976.20/976.95 late in New York on Thursday, when it hit a record high of $991.90.

US jobs figures are probably going to be on the bearish side and therefore might encourage a further rally in the gold price, Dan Smith, analyst at Standard Chartered Bank, said.

The investor interest is incredibly strong across the whole commodities complex and gold is the prime hedge against inflation and a weaker dollar, he added.

Another loss of jobs would fuel speculation that the Fed would have to cut rates more aggressively. The outlook for further US rate cuts would weigh on the dollar and would be positive for gold.

Gold has gained nearly 20 per cent in 2008 as funds, speculators and investors buy the precious metal on expectations of further interest rate cuts in the United States and record-high oil, which elevates its safe-haven appeal.

In a bull market, strength begets strength and that seems to the driving force behind the repeated attempt to breach the $1,000 level, said Pradeep Unni, analyst at Vision Commodities.

With all fundamentals intact and bullish momentum ticking consistently, gold should ideally continue to gain in the coming days. Platinum fell nearly 5 per cent to a 2-week low as selling picked up on news that mines in South Africa, the world’s top platinum producer, would get more electricity supply.

The South African government confirmed that it would let mines increase power consumption to 95 per cent from 90 per cent.

Platinum fell as low as $2,065 an ounce and was last quoted at $2,080/2,090 an ounce, against $2,170/2,180. It hit a record high of $2,290 this week on supply concerns.

Silver edged higher to $20.17/20.22 an ounce from $20.15/20.18 in New York, having reached a 27-year peak of $21.20 on Thursday. Palladium fell 2.7 per cent to $499/504 from $513/516 an ounce.—Reuters