Gold tests $1,120 as US dollar extends losses ahead of US jobs data

Gold remained steady above US$1,110/oz, reaching an intraday high of US$1,119/oz on Thursday as the US dollar continued to decline against other major currencies ahead of Friday’s key US employment data.
The American currency has been in decline against the euro this week after the EU agreed on a mechanism to provide Greece with financial aid together with the International Monetary Fund (IMF) if the debt-laden country is unable to raise the sufficient funds from the market. The deal, which was reached late last week, provided Europe’s single currency with immediate relief, though did little to improve the long-term outlook for Europe’s debt crisis, limiting gains in the euro.
The uncertainly over Greece's fiscal situation has been keeping the euro under pressure for weeks, while boosting the appeal of the safe-haven US dollar.
Gold is seen as a riskier alternative to the US dollar and usually moves inversely to the greenback.
In other news, bank Standard Chartered (LSE: STAN) cut its gold price forecast for 2011 from US$1,300/oz to US$1,100/oz.
The yellow metal got more support from today’s rally in Asian equity markets and subsequent gains in Europe.
Gold was steady at US$1,116/oz, while silver and platinum improved to US$17.69/oz and US$1,659/oz respectively.
Miners were buoyant today with all major stocks posting gains of over 1%. In the FTSE 100, gold miner Randgold Resources (LSE: RRS) rose 2.3%, while platinum producer Lonmin (LSE: LMI) added 2% and silver miner Fresnillo (LSE: FRES) tacked on 1.6%.
Specialty chemicals group Johnson Matthey (LSE: JMAT) added 1.6%.
Gold miner Petropavlovsk (LSE: POG) led the sector in the FTSE 250, advancing 4%. Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) followed with gains of 2.6% and 1.1% respectively.
Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) led the juniors, rallying 16%. South American based explorer Mariana Resources (AIM: MARL), Argentina focused gold explorer Patagonia Gold (AIM: PGD) and Africa focused gold miner Pan African Resources (AIM: PAF) followed with gains of 7%, 6% and 4.5% respectively.
Turkey focused gold miner Ariana Resources (AIM: AAU) and junior diamond miner Stellar Diamonds (AIM: STEL) slipped 12.5% and 5% respectively.

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