Gold down .3pct on Obama's jobs plan

Gold ticked down 0.3 per cent on Friday, having risen sharply in the previous session, as investors digested US President Barack Obama's ambitious job plans to spur economic growth, which could dent bullion's safe-haven appeal.

Although the lingering debt crisis in Europe and volatile currencies are supportive for gold, the metal could take its cue from the follow-up to Obama's $447 billion proposal.

Spot gold eased to $1,862.20 an ounce by 0502 GMT, below a lifetime high of around $1,920 hit this week, with speculators taking profits from Thursday's 3 per cent rally.

"I think Obama's speech was actually better than expected. The market was pricing in for a $300bn dollar package," said Natalie Robertson, a commodities strategist at ANZ.

"Also a senior Republican said the proposal merits consideration, so that could also be seen as a sign the Republicans could pass the bill. The risk for gold is to the downside, but I think it will settle at around $1,800 to $1,810."

Other markets shrugged off the speech and instead focused on economic data from China, with the Nikkei flat and the dollar index off two-month highs.

US gold futures added $7.7 an ounce to $1,865.2 an ounce.

Asian stocks inched up on Friday as slightly weaker Chinese consumer prices data soothed fears over inflationary pressures building in the world's No 2 economy, but the mood was cautious after Western central banks failed to offer any fresh stimulus plans.

Gold, which shrugged off the Chinese data, which was within market expectations, is likely to look to US stocks for direction.

"Let's see how the US stocks react, and I think nobody wants to go short at around these levels," said a physical dealer in Hong Kong. "We don't see much selling in the physical market, but investors do take profits at high levels."

Investors turned their attention again to the state of the US economy after Federal Reserve Chairman Ben Bernanke said the US central bank "will do all it can" to boost economic growth and reduce unemployment, without offering details.

The uncertainties around global economic growth have driven gold prices to scale record highs since July, and are expected to underpin sentiment for the metal until investors are convinced the danger of recession is past.

"The lack of details on further stimulus plans that the Fed could pursue may prompt some short term profit taking in gold. However, in the long term, I think gold remains attractive amidst slowing growth and economic uncertainty," said Ong Yi Ling, an analyst at Phillip Futures.

"Time will be needed before the measures proposed by President Obama are implemented and translate into growth. Effects will be lagged and it's not going to improve the job markets so quickly."

In the energy market, Brent crude oil edged up towards $115 a barrel on Friday, after falling more than a dollar in the previous session, supported by storm threats and the US president's plan to revive the economy of world's largest oil consumer.