Gold climbs to five-month high on U.S. jobs, security fears

By Zandi Shabalala

LONDON (Reuters) - Gold hit a five-month high on Friday after U.S. jobs data dampened expectations that the U.S. Federal Reserve would raise interest rates and amid rising global security tensions.

U.S. employers added the fewest number of workers in 10 months in March, boosting gold which is most attractive to investors in a low interest rate environment.

Spot gold rose 1.2 percent to $1,265.95 an ounce by 1400 GMT after touching its highest since Nov. 10 at $1,270.46, putting it on track for a fourth consecutive week of gains. U.S. gold futures climbed 1.1 percent to $1,267.60 an ounce.

"This is the most supportive environment we have seen for gold in some time given that there is geopolitical tension and (a) disappointing U.S. payrolls number," Hamza Khan, head of commodities strategy at ING, said.

Gold was also underpinned by investors looking for safety after the United States fired cruise missiles at a Syrian air base, escalating tensions with Russia and Iran.

Russia, a staunch ally of Syria, said relations between Washington and Moscow had been seriously damaged by the strike which was in retaliation for a deadly chemical attack on a rebel-held area of Syria.

"There is the risk that the fight over Syria will lead to a larger confrontation in which Iran and Russia, and the U.S., could get involved, so it could have more serious implications overall," Commodity Discovery Fund founder Willem Middelkoop said.

Gold is often used as a hedge against political and financial uncertainty and security risks. It has benefited alongside other assets considered safe, such as the yen and U.S. Treasury bonds. [MKTS/GLOB]

But some analysts say this support is unlikely to be sustained.

"When you look back at the historical record, these bids for gold based on 'edge-of-the-world' or wars tend to be short-lived and are followed by profit taking," Societe Generale's head of Metals Research Robin Bhar said.

Gold was also supported by technicals on Friday.

"Gold has broken the 200-day moving average intraday and has tested its upper resistance at $1,264, the Feb. 28 high," Jeffrey Halley, senior market analyst at OANDA, said.

"A daily close above these levels can open a technical move towards $1,300 with support now at $1,250."

MKS PAMP analyst Tim Brown said if gold consolidated above $1,260 it could be a catalyst for a push higher.

Spot silver rose 0.7 percent to $18.35 an ounce, after touching $18.47, the highest since Feb. 27.

Platinum inched up 0.6 percent to $963 while palladium also added 0.2 percent to reach $805.80.

(Additional reporting by Nallur Sethuraman in Bengaluru and Jan Harvey in London; editing by Susan Thomas/David Clarke/Alexander Smith)