Tokyo - Gold held steady around $1 090 an ounce on Friday after its rally to a record high this week on anticipation of renewed central bank demand came to a halt, with investors looking to economic data for direction.
US October non-farm payrolls data, due at 13:30 GMT, is expected to highlight the strength of the economic recovery, give a clear direction to the dollar and set the tone for the gold market.
Fewer job losses than expected could prompt investors to move away from the dollar into recovery-sensitive assets, such as stocks and commodities, including gold, traders said.
Gold is also considered a hedge against a weakening dollar.
Analysts polled by Reuters predicted US employers sliced 175 000 from their payrolls in October, fewer than the 263 000 jobs lost in September. The jobless rate likely edged up to 9.9% from a 26-year high of 9.8% in September.
"A bullish number could drag down the dollar and, as a result, prop up the gold market," said Tatsufumi Okoshi, senior economist at Nomura Securities.
"We expect the dollar's downtrend to extend into the first quarter of next year, likely sending the euro to $1.55 by then. Given that scenario, gold has an upside potential to rise to and above $1 100 in coming months before the dollar eventually makes a turnround and casts a shadow over gold," he said.
Spot gold was at $1 090.45 an ounce at 03:16 GMT, up 0.1% from New York's notional close of $1 089.55. It hit a record high of $1 097.25 on Wednesday.
At the current level it is poised to rise about 4.4% on the week, the biggest weekly gain since early October.
US gold futures for December delivery stood at $1 091.00 an ounce after rising $2 to $1 089.30 on Thursday.
In the currency market, the euro was little changed at $1.4868, off one-week highs above $1.49 marked earlier this week.
On Tuesday, bullion rallied $25, largely driven by news of India's purchase last month of 200 tonnes of bullion from the International Monetary Fund, which soothed investor nerves about possible oversupply in the gold market.
The IMF is selling another 200 tonnes of gold.
Asian central banks appear to be in little hurry to follow India's lead and make big purchases of gold given its high market price and the availability of cheaper domestically produced gold.
Technically, a correction in gold could extend to the $1 060 to $1 065 zone. But a further downturn to and below the psychologically important $1 000 level is unlikely in the near term, analysts said.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell 0.055 tonnes to 1 108.344 tonnes on Thursday, marking the first decline since October 30.
Another focus is the outcome of a November 6-7 meeting of G20 finance officials in St. Andrews, Scotland.
Six weeks after world leaders vowed to rebalance the global economy, finance ministers and central bank governors are set this weekend to struggle with the complex, politically sensitive process of building a mechanism to achieve that goal.
- Reuters