Courtesy of Reuters:

LONDON, March 7 - Gold drifted higher towards the key $1,000 level on Friday after slipping from record highs in the previous session, with investors awaiting U.S. jobs data for near-term direction.
 

A record low dollar against the euro and strong oil prices were seen underpinning gold prices, but platinum and palladium fell sharply on expectations that South African power problems could improve in the coming weeks.
 

Gold <XAU=&gt; rose as high as $984.70 an ounce and was quoted at $980.15/980.90 at 1124 GMT, against $976.20/976.95 late in New York on Thursday, when it hit a record high of $991.90.
 

"U.S. jobs figures are probably going to be on the bearish side and therefore might encourage a further rally in the gold price,&quot; Dan Smith, analyst at Standard Chartered Bank, said.
 

"The investor interest is incredibly strong across the whole commodities complex and gold is the prime hedge against inflation and a weaker dollar,&quot; he added.
 

The euro powered to fresh peaks above $1.54, after the European Central Bank signalled it was in no hurry to start cutting rates in a month when the U.S. Federal Reserve is seen slashing policy by 75 basis points.
 

A weak reading from the keenly watched non-farm payrolls, due at 1330 GMT, could further weaken a dollar already at record troughs versus the Swiss franc and currency basket and closing in on the key 100 yen mark for the first time in over a decade.
 

A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
 

Oil stayed within sight of its record high from the previous session, with a tumbling U.S. dollar, fund flows and OPEC's reluctance to pump extra crude providing support.
 

"The most important item today is the U.S. labour market; in particular the non-farm payrolls are in the spotlight," said Dresdner Kleinwort said in a daily market report.
 

"Another loss of jobs would fuel speculation that the Fed would have to cut rates more aggressively. The outlook for further U.S. rate cuts would weigh on the dollar and would be positive for gold.";

SENTIMENT BULLISH

Gold has gained nearly 20 percent in 2008 as funds, speculators and investors buy the precious metal on expectations of further interest rate cuts in the United States and record-high oil, which elevates its safe-haven appeal.
 

New York-listed StreetTRACKS Gold Shares GLD.P, the world's largest gold-backed ETF, showed gold holdings of 647.56 tonnes -- near a record of 652.56 tonnes in mid-January.
 

"In a bull market, strength begets strength and that seems to the driving force behind the repeated attempt to breach the $1,000 level,&quot; said Pradeep Unni, analyst at Vision Commodities.
 

"With all fundamentals intact and bullish momentum ticking consistently, gold should ideally continue to gain in the coming days.";
 

Platinum fell nearly 5 percent to a 2-week low as selling picked up on news that mines in South Africa, the world's top platinum producer, would get more electricity supply.
 

The South African government confirmed that it would let mines increase power consumption to 95 percent from 90 percent.