Wholesale US dollar gold prices slipped 0.4% from new 11-month highs in London trade Friday morning, dipping beneath $1,790 per ounce as European stock markets crept higher.

Wholesale silver bullion prices eased back below $35.00 per ounce – but also held 1.1% up for the week – as commodities held flat and major-economy government bonds ticked lower.

The Euro currency held above $1.30 despite a sharp drop in Germany's industrial orders data.

Latest US jobs market data were due just ahead of the start of New York trade, with analysts expecting on average a rise of 113,000 last month from August.

"The labor market needs to improve for QE3 to end and, if it does not improve as the Fed wants, other [monetary policy] measures will be introduced," reckons Standard Bank strategist Steven Barrow.

"If the third round of quantitative easing leads to further weakness of the US dollar, [other] central banks may be prompted to switch more cash reserves into gold," says Evy Hambro, co-manager of the UK's giant Blackrock Gold & General mining-stock fund.

The chart of dollar gold prices, says a new report from Hambro's team, "has turned decidedly bullish with the 50-day moving average rising above the 200-day moving average.

"The last time this happened was in February 2009...shortly after the implementation of QE1. Then, gold was $900 and never looked back. Should we witness a similar rally, prices would be taken to $2,400 by midsummer next year."

Bank analysts and trading desks today cited "further support" for gold prices from geopolitical tension over fighting on the Syria-Turkey border, plus the fast-spreading industrial unrest in South Africa – world #6 for gold mining output.

Japan's Toyota Motor Corp. said workers would return today to its Durban plant after it granted the 5.4% pay rise demanded during 4 days of wildcat stoppages.

Toyota's car sales in China were 40% down in September from the same month last year, it said today, amid violent protests and consumer boycotts sparked by Japan's purchase of disputed islands in the East China Sea.

"The gold market and for that matter most markets love big figures and tend to gravitate towards them," says David Govett at privately-owned commodities broker Marex Spectron.

"The $1800 level may not be the most important figure technically, but...if we can break above and hold this should give us impetus towards the mid-1800s."

Calling momentum in the gold price "impressive" however, one London market-maker says "Buyers have been meeting a good deal of sellers – the [mining] producers.

"Hence we find it impressive that the market did not pull back."

Looking at the $1791-1800 price level, "Thick producer and physical offers were present on the last 2 attempts through this area," agrees Swiss refinery MKS's Moudi Raad in Geneva.

"I think we will have to see some significant macro news to push us through this."

Over in India, meantime – home to the world's heaviest gold consumers, with private households accounting for 1 ounce in every 5 sold worldwide over the last decade – importers of gold bullion have been re-stocking their inventory on the recent dip in rupee gold prices, the Economic Times reports.

"There has been a sustained pickup in the last 10-15 days as people are comfortable with the current rates," the paper quotes Harshad Ajmera of the JJ Gold House wholesalers in Kolkata.

Next month brings the Hindu festival of Diwali, typically the peak season for India gold demand amid the post-harvest wedding season.

Adrian Ash

BullionVault

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Adrian Ash is head of research at BullionVault – the secure, low-cost gold and silver market for private investors online, where you can buy physical gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

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