By Allen Sykora Of DOW JONES NEWSWIRES Gold futures hit their strongest level in nearly three weeks early Wednesday largely on continuing investment flows into commodities generally, but also helped some when a private-sector employment report showed December job losses slightly less than economists were expecting. At 9:03 a.m. EST (1403 GMT), lightly traded but nearby January gold is up $12.50 to $1,130.60 an ounce on the Comex division of the New York Mercantile Exchange, while most-active February is up $13.40 to $1,132.10 and hit a high of $1,133 that was its strongest level since Dec. 17. Most-active March silver is up 26.5 cents to $18.065. One trader characterized the move as largely a continuing of the fund inflows back into gold and other commodities that came with the start of a new trading year on Monday and continued on a smaller scale Tuesday. Otherwise, he said, the supply/demand fundamentals would not seem to support the gains in some commodities such as copper, which overnight hit a 17-month high despite rising inventories, still-muted demand outside of China and resolution of two strikes this week in Chile. "These things are in a world of their own," the trader said about commodity-price rises. Gold is up even though the March dollar index and stock-index futures are nearly flat. Others said a jobs report payroll company Automatic Data Processing Inc. (ADP) and consultancy Macroeconomic Advisers offered some support. Private-sector jobs in the U.S. fell by 84,000 in December, the smallest drop since March 2008. This is slightly below the 90,000 drop projected by economists in a Dow Jones Newswires survey. The data may have helped general risk appetite some. The March S&P 500 stock-index futures pared earlier losses slightly. Some buy stops accelerated the move in gold, said Carl Johansson, senior precious metals analyst at Goldessential.com. These are pre-placed orders triggered when certain chart points are hit. For now at least, the market appears to be factoring in ideas U.S. interest rates will remain low, said George Gero, vice president with RBC Capital Markets Global Futures. This would support gold, especially since it could mean further dollar weakness, which in turn means buying of the precious metal as a hedge. Some of the buying appeared to be traders covering positions in which they have previously sold, Gero said. Still, other traders have been tending to use pullbacks as buying opportunities, one dealer said. Meanwhile, April platinum is up $25.20 to $1,563 an ounce, while March palladium is up $2.05 to $424. "Signs of recovery in the U.S. auto market and expectations U.S. ETFs could soon begin trading continue to underpin PGM prices," said James Moore, analyst with TheBullionDesk.com. -By Allen Sykora, Dow Jones Newswires; 541-318-8765; allen.sykora@dowjones.com

Source