quote:

NEW YORK, Nov 2 (Reuters) - Gold futures in New York
touched $800 early on Friday on inflation fears sparked by
stronger crude oil prices and a record low dollar following a
surprisingly strong U.S. jobs report.

"We had a bit of gyration but the buyers stepped in and
didn't let prices go down. You have interest. This could become
a runaway market if we don't get the pullback that people
want," said Jonathan Jossen, an independent COMEX floor
trader.

At 10:46 a.m. EDT (1446 GMT), most-active December gold
(GCZ7: Quote, Profile, Research) on the COMEX division of the New York Mercantile
Exchange was up $4.10 at $797.80 an ounce, after hitting a
early-session high of $800.80. It hit a low of $790.00.

Jossen also cited heavy trading of both gold futures call
and put options.

U.S. employers added a surprisingly strong 166,000 new
nonfarm jobs in October, well ahead of forecasts in an early
sign that consumer incomes may be better supported than thought
heading into the fourth quarter, according to a government
report.

The dollar initially gained on the payrolls data but soon
fell to a record low against the euro. It gained ground versus
the yen after strong data on the job market encouraged
investors to enter risky carry trades.

Oil jumped more than $1 and held above $94 a barrel as
concerns about tight supplies in the run-up to winter prevented
a major sell-off.

Inflation concerns boosted gold as investors worried that
robust energy prices and more expensive import goods because of
a weak dollar could lead to rising prices.

"They say that inflation is under control. But the market
is telling you differently. Historically, gold has been a
barometer of inflation," said one precious metals dealer in New
York.

The dealer added that gold was currently a bull market.

News of strikes in African gold mines also extended support
to bullion.

AngloGold Ashanti Ltd (ANGJ.J: Quote, Profile, Research) shut one of its larger mines
in South Africa on Friday after a miner was killed in a
rock-fall. A miners' strike to protest a spate of mine deaths
in the country loomed.

AngloGold, the world's third-biggest gold producer, shut
its TauTona mine after the worker died in the early hours of
Friday.

Meanwhile, a strike disrupting Tanzania's Bulyanhulu gold
mine, owned by Canada's Barrick Gold Corp (ABX.TO: Quote, Profile, Research), will
continue until workers' grievances on pay, health and risk
allowances are met, a union official said on Friday.


In the United States, the U.S. House of Representatives on
Thursday voted to slap the first-ever federal royalties on
gold, silver, copper, uranium and other minerals mined on
public lands.

The House voted 244-166 for the Hardrock Mining and
Reclamation Act of 2007, which would levy an 8 percent royalty
on the gross revenue from new hard-rock mining activities and
impose a 4 percent royalty on existing operations. But the
White House threatened to veto the bill