NEW YORK: (Commodity Online): Finally, gold has crossed the $1,100 per ounce mark with ample help from rumours that Sri Lanka’s central bank has also started buying gold to diversify reserves and data showed that the US unemployment rate unexpectedly jumped to 10.2 percent in October.

These two elements played a crucial role in gold’s prices soaring above $1,100 per ounce last week in global bullion markets.

While doubts about an economic recovery boosted gold, other precious metals with an industrial component fell, their demand outlook dented.

US employers cut 190,000 jobs in October, greater than the 175,000 fewer jobs forecast, and the unemployment rate rose to 10.2 per cent, a 26-1/2-year high that was above average forecasts of a 9.9 per cent rate.

Gold still enjoyed support from prospects of central banks buying the yellow metal to diversify reserves.

The trigger for the surge this week was news that the International Monetary Fund had sold 200 tonnes of gold to the Reserve Bank of India for $6.7 billion. People are focusing on pent up demand for gold from central banks in emerging markets.

The central bank community for the first time in 20 years is possibly going to be a net buyer of gold having been a net seller since 1988.

Analysts think that Asian central banks may not hurry to follow India’s lead given current record prices and the availability of cheaper domestically produced gold.

Indian buying was very significant, but those getting excited about the potential for copy cat moves need to consider a number of factors. Culturally, India is more favourably disposed to gold than every other country. Second, it might be politically dangerous to be accumulating reserves at the all-time price high.

The central bank story has offset some selling by investors as seen in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust. SPDR’s holdings fell 0.055 tonnes to 1,108.344 tonnes on Thursday, marking the first decline since October 30.