Gold firms near one-month peak on softer dollar, slowdown worries

Gold prices firmed on Friday to hover near a one-month high, as a retreat in dollar and U.S. Treasury yields and growing recession fears boosted demand, keeping the safe-haven metal on track for its third straight weekly rise.

FUNDAMENTALS

* Spot gold was up 0.2% at $1,793.88 per ounce, as of 0054 GMT, after hitting its highest since July 5 on Thursday. Bullion is up 1.6% so far this week.


* U.S. gold futures rose 0.2% to $1,810.60.

* The dollar struggled to gain a footing on Friday after dropping 0.6% overnight against its rivals, making gold more appealing for other currency holders.

* The yield on 10-year Treasury notes also slipped, reducing the opportunity cost of holding non-interest bearing gold.

* The Bank of England raised interest rates by the most in 27 years on Thursday in an attempt to smother surging inflation on track to top 13%, even as it warned a long recession is coming.

* The monthly U.S. non-farm payrolls report will be closely watched on Friday that could offer more clarity on Federal Reserve's aggressive tightening plans to fight against inflation.

* Economists expect an increase of 250,000 jobs for the month of July. Meanwhile, data on Thursday showed the number of Americans filing new claims for unemployment benefits increased last week.

* China fired multiple missiles near Taiwan in its biggest ever military drills in the Taiwan Strait after U.S. House of Representatives Speaker Nancy Pelosi visited the self-ruled island.

* SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings fell 0.03 percent to 1,000.32 tonnes on Thursday.

* Spot silver rose 0.2% to $20.21 per ounce, platinum gained 0.9% to $934.25, and palladium climbed 1.1% to $2,086.68.

DATA/EVENTS (GMT)

0600 Germany Industrial Output MM, YY June

0600 UK Halifax House Prices MM, YY July

0645 France Reserve Assets Total July

1230 US Non-Farm Payrolls July

1230 US Unemployment Rate July