US gold shoots over $700/oz ahead of Friday payrolls

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U.S. gold futures prices rose above a key psychological target of $700 an ounce to a four-month high on Thursday as funds renewed their buying ahead of expectations for a weak U.S. employment report on Friday, traders said.

"I think it's people who are buying gold in anticipation of a disappointing employment number tomorrow. Payrolls are expected to be weak and would argue for a rate cut and therefore flight-to-quality buying of gold," a trader said.

Benchmark December gold on the COMEX division of the New York Mercantile Exchange jumped $10.90 to $701.60 an ounce, and charged up to a $703.50 high, dating back to May 9. The session low was $690.20 an ounce.

Technical gold buyers had been aiming for the key goal at $700 an ounce since Tuesday's rally. The upper band of December gold's range dating back to July 2006 at $720 an ounce marks the next big target for that contract.

Gold was strong along with other metals as one trader pointed out funds renew their start-of-month purchases around the fourth business day . "It's the fourth trading day of the month and funds traditionally get in on this day. The open interest has really come off in the last month. You have crude oil up to $77. You have the monetary crisis. And people are piling in. It's just about time," "We're talking about under-ownership of gold. The open interest in gold futures is really low and it's starting to come back up. That's what's pushing the price up," he added.