Published: 8:53AM BST 04 Sep 2009  The price hit an intra-day peak of $992.55, which marked the highest price since February 24. It was at $989.10 an ounce at midday in America, against $976.60 an ounce late in New York on Wednesday.  US December gold futures were up $10.70 at $989.20 an ounce on the Comex division of the New York Mercantile Exchange.  Fears that US payrolls data may disappoint sparked a flight to quality among investors on Wednesday. The metal broke out of its previous $930-$960 range as a move through technical resistance above $960 sparked a rally.  Bill O'Neill, managing partner of New Jersey-based Logic Advisors, said asset-diversification demand for gold and other precious metals by jittery investors amid shaky equities markets had propelled gold's rally.  VTB Capital analyst Andrey Kryuchenkov said gold's immediate move had been largely technical, with the dollar offering little support and physical demand weakening as prices rose.  Gold will need to hold its current levels to build a base for further gains, he said. "If we close above $980, we will retest $990, and probably stay in this range."  The dollar index, which measures the US currency's performance against a basket of six major currencies, initially softened early on Thursday, boosting interest in gold as an alternative asset and driving prices to fresh highs.  The market was awaiting fresh clues on the economic outlook from Friday's payrolls numbers. Investors were spooked after a US employment report released on Wednesday showed more private sector job losses than expected.  The data will be closely watched for its impact on the dollar, and its subsequent effect on gold. The metal is set to benefit from renewed demand if the US currency slips further.  "Investment demand for gold is still very strong, and that is going to help drive the price higher over time," said Helen Henton, head of commodities at Standard Chartered.  "We think it's going to break $1,000 by the fourth quarter, mainly driven by a weakening US dollar."
Gold prices have reached their highest level since February on strong investment demand amid caution ahead of key US payrolls data.