Gold rose in Europe on Thursday, rebounding after the previous session’s late price retreat, as dollar weakness, concern over euro zone sovereign debt and unrest across the Middle East region supported buying.
The metal is on track for a tenth consecutive quarter of gains, also supported by low interest rates and high liquidity in the wake of a raft of quantitative easing programmes.
But its quarterly rise is set to be its smallest since the third quarter of 2008, before the financial crisis took hold, as investors fret over the prospect of monetary tightening in the United States and the euro zone.
Investors are awaiting a report on US non-farm payrolls for March due Friday, considered a key indicator of the health of the US economy. Forecasts suggest the economy recorded a second month of solid job growth this month.
Signs the US jobs market is recovering could support calls from some Fed officials to wind up the central bank’s monetary easing programme earlier than expected.
The dollar fell 0.4 percent against a basket of major currencies on Thursday. A weaker dollar makes assets priced in the US currency cheaper for other currency holders.
The euro was up 0.4 percent on anticipation of a rate hike from the European Central Bank next month, but rating agency Moody’s warned further sovereign ratings downgrades for euro zone countries cannot be ruled out.
Concerns over euro zone sovereign debt were a major factor fuelling a 30 percent rise in gold prices last year.
Oil prices also climbed, with Brent crude futures heading for their biggest quarterly gain in almost two years as violence swept across the Middle East and North Africa.
As unrest simmered in Libya, US officials said President Barack Obama had authorised covert support for rebels fighting Muammar Gaddafi.
On the supply side of the market, China’s leading mined gold producer, Zijin Mining, said it expects gold prices to rise above $1,500 an ounce by year end, and said it plans to produce 62.57 tonnes of gold this year.
Among other precious metals, silver was bid at $37.76 an ounce against $37.44. Silver is on track to rise 22 percent this quarter, benefiting from gains in gold and expectations that industrial demand for the metal will improve.