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Tokyo - Gold was a touch softer near $975 on Friday as traders grew cautious before the release of US employment data, which could provide further insight into whether the economy is pulling out of a deep slump
The precious metal rose about 2% on Thursday after Goldman Sachs raised its forecast for oil prices at the end of 2009 to $85 a barrel from $65, triggering inflation-hedge buying of gold.
Gold came close to $990 this week, within sight of the $1 000 mark first hit in March 2008 and last touched in February this year.
"I think there's a sense of caution in the market as gold nears the $1 000 mark," said Shuji Sugata, a manager at Mitsubishi Corp Futures & Securities in Tokyo.
Gold was at $977.60 per ounce at 05:20 GMT, down 0.2% from New York's notional close of $979.10.
US gold futures for August delivery were at $979.10 per ounce, down 0.3%.
Sugata said many traders were refraining from trading actively before the release of the US Labour Department's May employment report at 12:30 GMT. "They'll want to see how the market will react to the data," he said.
In other closely followed data, the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings remained at 1 132.50 tonnes as of June 4, unchanged from the previous business day.
Holdings remain within sight of the record high of 1 134.03 tonnes marked on June 1, however.
Changes in gold ETF holdings are closely watched by market participants because sharp inflows into them could be a bullish signal that longer-term retail investors are entering the market.
Sugata said physical buying had petered out after gold topped
$900.
He said buying could resume, however, if traders begin to feel comfortable at these high levels.
Oil prices hit a seven-month high of $69.60 per barrel on Thursday after US data showed a drop in jobless claims, boosting expectations of an economic recovery that could revive energy demand. It continues to trade above $69.
Climbing oil prices have become a factor to influence the gold market by igniting inflation fears.
The dollar inched down against a basket of major currencies on Friday, with investors shifting money to higher-yielding currencies from the safe-haven dollar on views the global recession is easing.
- Reuters