Gold at one-month high in Europe

Gold rose to levels around 1.5 percent away from record highs on Monday after surprisingly weak US employment data kept the dollar at one-month lows and suppressed investor risk appetite. Friday's key US monthly jobs report showed employers hired the smallest number of workers in eight months in May, while the unemployment rate rose to 9.1 percent, up for a second month, which reignited worries about the growth outlook for the world's largest economy.
Spot gold edged up 0.7 percent to $1,551.75 an ounce by 1415 GMT, building on three consecutive weeks of gains and rising to its highest level since early May. US gold rose 0.7 percent to $1,553.10. "Weak US economic data last week are strengthening expectations that the Federal Reserve will maintain key interest rates at the current very low level for even longer, which will keep the opportunity costs for precious metals low," said Commerzbank in a note.
"The climate for precious metals remains, therefore, positive in general." Uncertainty over the future of Yemen while President Ali Abdullah Saleh was recovering from injuries sustained in an attack on his palace on Friday also unnerved markets. "When you've got geopolitical factors, what's going on in Yemen and elsewhere and still very high energy prices, you don't want to be short of gold," said Credit Agricole analyst Robin Bhar. "If anything, you want to put more cash into gold as a safe-haven store of value, because we don't know what is coming around the corner in terms of growth."
Greece's campaign to secure another bailout to avoid default added to investor worries. International lenders on Friday said Athens was likely to get a fresh multi-billion euro lifeline next month, but there remained enough uncertainty to whet investor appetite for a safe haven.
Reflecting the improvement in demand for gold in what is traditionally a period of slower consumption was the largest increase in speculative holdings of gold futures in 13 months last week, according to data from the US Commodity Futures Trading Commission (CFTC).
The net non-commercial position in gold, often used as a proxy for speculative activity, staged its largest weekly rise since April 2010. Meanwhile, global holdings of gold as tracked by Reuters showed a second net weekly inflow, up 239,400 ounces to 64.597 million ounces. Also helping to keep gold steady, the dollar held at one-month lows against a basket of major currencies after last week's employment figures reinforced the notion that US rates will stay low for an extended period.
Spot silver rose 2.7 percent to $37.18, after having touched 1-1/2 week lows in the previous session, bringing the gold/silver ratio to 42.1, its lowest since Thursday, denoting its outperformance over gold in the last few trading days. Silver prices have fallen by more than a quarter since hitting a record $49.51 on April 28 but are still up 19 percent on the year, compared with gold's 9 percent rise. Platinum was last up 0.6 percent at $1,821.49 an ounce, while palladium was up 1.5 percent at $791.97, having risen by as much as 1.7 percent to an intraday peak at $793.50, its highest since early May.