By Kim Kyoungwha Nov. 6 (Bloomberg) -- Gold, little changed in Asia, is poised for its strongest weekly advance in a month as signs of economic recovery sap demand for the dollar, increasing the appeal of the precious metal. Bullion, up 24 percent this year, is approaching $1,100 an ounce for the first time as investors seek to protect their wealth from the threat of inflation and the debasement of the U.S. currency. Asian stocks rose after better-than-forecast U.S. unemployment and productivity data lifted the Dow Jones Industrial Average to its highest in two weeks. “The preference for gold continues as the global recovery gathers momentum and as the dollar stays out of favor,” said Yu Kyung Kyu, a trader with Eugene Investment & Futures Co. in Seoul. “Still, we may witness market players reluctant to go too aggressive just ahead of the key $1,100 level.” Gold for immediate delivery traded at $1,091.60 an ounce at 1:16 p.m. in Singapore, from $1,090.30 yesterday and $1,045.40 at the end of last week. The metal touched an all-time high of $1,097.72 on Nov. 4 and has gained 4.4 percent this week, the most since the week ended Oct. 9. The MSCI Asia Pacific Index of regional shares rose 1 percent. The dollar traded at $1.4864 per euro in Tokyo from $1.4871 in New York and is down 1 percent this week. U.S. labor productivity, a measure of employee output per hour, jumped at a 9.5 percent annual rate in the third quarter, exceeding the highest economist forecast, data showed yesterday. Initial jobless claims dropped by 20,000 to 512,000 in the week ended Oct. 31, the fewest since January. Gains Forecast Gold may extend this week’s record on speculation that central banks and investors will purchase the metal to hedge against a declining dollar, a survey showed. The Reserve Bank of India said on Nov. 3 that it bought 200 metric tons of gold from the International Monetary Fund last month at an average price of $1,045 an ounce. Seventeen of 23 traders, investors and analysts surveyed by Bloomberg, or 74 percent, said bullion will rise next week. Four forecast lower prices and two were neutral. Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, declined to 1,108.34 tons as of yesterday from 1,108.40 tons on Nov. 4, figures on the company’s Web site showed. Among other precious metals, silver rose 0.5 percent to $17.49 an ounce, platinum advanced 0.2 percent to $1,358.25 an ounce and palladium added 0.6 percent to $332.75 an ounce. To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net

Source