LONDON: Gold prices hit their highest since mid-November on Friday as expectations that US monetary policy will remain ultra-loose boosted investor appetite for bullion, but struggled to maintain traction ahead of key US payrolls data later in the day.
Spot gold hit a high of $1,762.90 and was little changed at $1,759.00 an ounce at 1015 GMT, against $1,759.39 late on Thursday. US gold futures for February delivery were up $3.20 an ounce at $1,762,50.
A Federal Reserve pledge last month to keep interest rates at rock-bottom levels and hints of another round of monetary easing, which would keep the dollar weak and the opportunity cost of holding bullion low, have helped lift gold prices by 12.5 percent this year.
Fed Chairman Ben Bernanke on Thursday defended the bank's policies against charges from Republican lawmakers they risked sparking inflation, saying the economy still needs plenty of support.
"Yesterday's reaffirmation from the US Fed (chairman) that he is committed to keep rates low.(has) given gold the necessary boost to hold gains and also break key resistance," said Richcomm Global Services senior analyst Pradeep Unni.
"Any better-than-expected jobs figure today will further add to risk appetite, which may push gold above $1,784," he added. "Disappointment in jobs data may drag gold below $1,730, but an extended sell off is not envisaged."
A brief push higher in the euro, which has been rangebound versus the dollar for much of Friday morning, lifted both gold and platinum prices to their highest in 11 weeks.
The euro was largely rangebound versus the dollar, however, ahead of the payrolls numbers. The data due at 1330 GMT, which is expected to show a 150,000 increase in payrolls last month, will be closely watched for its impact on both the dollar and wider investor sentiment.
European shares turned positive in choppy trading on Friday after upbeat macroeconomic news on the euro zone, while German bund futures also opened higher. Both markets were awaiting fresh direction from the payrolls numbers.
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