May 6 (Bloomberg) -- Gold climbed for the third straight day as slowing U.S. job losses raised prospects for an economic recovery and revived inflation, boosting demand for precious metals as a hedge. Platinum, palladium and silver also rose.
The UBS Bloomberg Constant Maturity Commodity Index of 26 futures rose as much as 2.9 percent, topping 1,000 for the first time since November. U.S. companies cut 491,000 jobs in April, the fewest since October, Automatic Data Processing Inc.’s ADP Employer Services reported. Some investors buy precious metals as hedge against inflation.
“Gold has caught a whiff of a broad-based commodity rally on the back of today’s better-than-expected ADP report,” said Ralph Preston, a commodity analyst at Heritage West Futures Inc. in San Diego. “However, trend forces are neutral and gold bulls are being held in the coral as they are unable to overcome $915 resistance in today’s trade.”
Gold futures for June delivery rose $6.70, or 0.7 percent, to $911 an ounce on the Comex division of the New York Mercantile Exchange. The most-active contract has climbed 2.6 percent this week.
Silver futures for July delivery climbed 29 cents, or 2.2 percent, to $13.71 an ounce in New York. The most-active contract slid 5.1 percent last month, while gold fell 3.7 percent.
Platinum futures for July delivery gained $5.20, or 0.5 percent, to $1,143.10 an ounce. The most-active contract has jumped 4.3 percent this week.
Palladium Climbs
Palladium futures for June delivery advanced $5.15, or 2.3 percent, to $228.05 an ounce and are up 6.6 percent since May 1. Last week, platinum tumbled 7.4 percent, the most since Dec. 5, and palladium plunged 9.2 percent.
“The precious metals market remains guardedly bullish,” Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said today in an e- mailed note. “It appears that only investment money with no home in the capital markets has found its way into precious metals, and once something looks good on the other side, it could pull the rug out from under these prices.”

Some traders, such as Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois, said they expect gold to drop to about $700 an ounce by year-end. Kaplan has been trading metals for more than three decades.
“I’m negative on gold. I think the recession will continue and during deflation, everything goes down,” Kaplan said in a telephone interview. “Our economy is still doing better than anybody else’s and money will continue to flow in the United States,” strengthening the dollar.
A gauge of personal spending rose 0.6 percent in March from a year earlier, the smallest gain since 1961, the Commerce Department in Washington said on April 30. The Federal Reserve’s preferred measure, which excludes food and fuel costs, climbed 1.8 percent in March from the same month last year.
In the 16-nation euro region, there’s “significantly less risk of deflation” than in the U.S, the International Monetary Fund said in a report on April 22