SINGAPORE - Gold ticked up on Friday and held near of a lifetime high, but improving US and China data, which suggested growing global economic strength, could curb gains.
China's manufacturing sector gathered momentum in September, handily beating market forecasts and providing further evidence that the economy is pulling smoothly out of a second-quarter slowdown.
Silver held near a 30-year high, platinum rose to a four-month high to track gains on TOCOM platinum futures while industrial demand helped sister metal palladium stayed near its strongest level since early 2008.
Spot gold added $4.70 an ounce to $1,309.95 after hitting a record around $1,315 on Thursday, racking up its eighth consecutive quarterly gain as the US Federal Reserve appeared ready to pump more cash in the struggling economy.
"I guess speculation will still be rife as to the state of the US economy. The need or not for a QE2 (second round of quantitative easing) from the Fed," said Darren Heatchcote, head of trading at Investec Australia in Sydney.
"I think we can expect (gold) to remain volatile. Its movement has been determined by the US dollar at the moment."
But Thursday's data showed new US jobless claims fell last week, regional manufacturing grew faster than expected and consumer spending was slightly stronger than expected earlier in the year, injecting a little caution about the prospects for more quantitative easing from the Fed.
"If it stays above $1,305, I think the more medium-term target could be sort of $1,345," said Heathcote of Investec, who pegged downside target around $1,290s.
US gold futures for December delivery rose $1.6 an ounce to $1,311.2 an ounce, having struck a record at $1,317.50 on Thursday.
The euro edged up toward a five-month high on the US dollar on Friday and the Australian dollar gained after upbeat Chinese data encouraged a little risk-taking in the higher-yielding currency ahead of US indicators.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings eased to 1,304.776 tons by Thursday from 1,305.688 tons on Tuesday. The holdings hit a record at 1,320.436 tons on June 29.
The physical sector noted selling from Indonesia and bargain hunting from Thai gold consumers, while dealers in Tokyo saw a bit of activity in Platinum Group Metals.
Higher gold prices widened the discounts for gold bars in Tokyo to 50 cents below the spot London price from 25 cents last week. China's financial markets are closed for a week from October 1 to 7 for the National Day holiday.
"There's a bit buying on TOCOM platinum, that's why spot price is increasing. But I don't see demand the industrial sector because the price is too high anyway," said a dealer in Tokyo.
"There's a bit of buying for palladium in Japan and also the other parts of Asia. That demand comes from the auto and dental industries."
Platinum and palladium are used in jewelry, autocatalysts and also in dentistry.
In other markets, The Nikkei pared gains sharply on Friday, weighed down by large-lot selling of futures and declines in banking shares, while oil rose above $80 a barrel, staying at a seven-week high.
