London - Gold held steady on Friday near two-month highs hit earlier this week, as investors sought further clarity on the outlook for U.S. monetary policy.
Strong U.S. jobs and manufacturing data this week has added to expectations the Federal Reserve may be set to curb its bullion-friendly stimulus measures, but investors looked for a better picture on the timing and scope of any reduction before placing fresh bets, analysts said.
Spot gold was flat at $1,375.01 an ounce by 1053 GMT. It was set to end the week little changed after a near 5 percent gain last week. U.S. gold futures for December delivery were up $4.00 at $1,374.80 an ounce.
“If the Fed is going to taper in September, that will be the binary event. It could have quite a big impact on gold,” said Matt Turner, an analyst at Macquarie. “The next big event is the non-farm payrolls for September.”
Europe's main stock markets were largely steady by mid-morning, after Asia saw an upbeat end to a torrid week, while the dollar was also flat against a basket of currencies.
Gold prices have fallen by nearly a fifth this year on the back of speculation that the Fed may rein in its $85 billion monthly bond-buying programme as early as next month.
It said earlier this year that the timing of such a move would depend on the U.S. economic recovery, and particularly the jobs market, which has brought U.S. data releases into particular focus for gold traders.
ASIAN DEMAND SUBDUED
Demand in top buyers India and China has been subdued ahead of a peak wedding and festival season that kicks off next month.
“Once the summer is over, we will see consistent buying from September through the end of the year,” said Peter Fung, head of dealing at Hong Kong's Wing Fung Precious Metals.
Premiums in Hong Kong, a supplier of gold to China, have fallen to about $4 an ounce over London spot prices as of Friday, dealers said, from $5 last week.
India may restart imports soon after the central bank clarified a new rule that brought the flow into the world's top gold consumer to a standstill at the end of July. The top gold consumer is battling with a record trade deficit.
South Africa's National Union of Mineworkers (NUM) is consulting its membership on a strike in the gold industry, which could start next week, halting production for the country's main mineral export.
NUM said its members in the construction sector would down tools on Monday, despite pleas from President Jacob Zuma and other government leaders for peaceful wage negotiations in Africa's largest economy.
Silver was last trading at $23.11 an ounce, unchanged from previous levels.
Platinum was also unchanged at $1,536.49 an ounce, while palladium was down 0.3 percent, at $750.22 an ounce. -Reuters