Gold soars nearly 1%, reversing early losses

Gold rose nearly one per cent in heavy trading on Friday, reversing early sharp losses, lifted by higher crude oil and US equities following an encouraging US job report. Bullion, which was flat for the week, initially tumbled in the face of a dollar rally and fading hopes of further US monetary stimulus after a third straight monthly growth in US employment. The metal later staged an impressive $40 (Dh146) turnaround to close above $1,700 an ounce. Price volatility has been increasing after a five per cent drop last Wednesday when Fed Chairman Ben Bernanke did not signal more easing was on the way. One money manager said investors have not completely ruled out further quantitative easing based on anaemic US growth and a lack of confidence in Europe to resolve its debt crisis. Even though the [job] number looks good, there's not an overwhelming sense that there's going to be great times ahead," said Jeffrey Sica, chief investment officer of SICA Wealth Management with more than $1 billion in assets. "As long as the ‘quantitative easing devaluating the dollar scenario' is present, it will support the price of gold," Sica said. Spot gold gained 0.7 per cent on the day to $1,710.81 an ounce by 2.58pm on Friday (1958 GMT), having fallen to a session low of $1,677.34, which is a six-week low. Gold was flat for the week, as its gains on Friday largely wiped out losses from earlier last week. Spot silver rose one per cent to $34.20 an ounce.