Gold touched 4,300 dollars an ounce today, its highest level in seven weeks, before settling around 4,260. A fourth consecutive trading day upwards. The reason isn't in gold - the reason is that the American labour market is slipping, and the dollar with it.

ADP reported a significant slowdown in private sector hiring in July, with most of the new jobs created in healthcare. That's a figure worth holding on to. When an economy is creating jobs mainly in hospitals, that isn't a sign of growth, it's a sign of demographics.

A weaker labour market lowered expectations that the Federal Reserve will raise rates in September. When rates don't rise, gold - which yields nothing - becomes more attractive. The dollar index stayed near a two-month low of 99.66 points.

The Japanese part of the story

The dollar is also under pressure after last week's joint US-Japan intervention to strengthen the yen. According to media reports, Japan sold nearly 60 billion dollars of US government bonds to finance the intervention, while American purchases of yen were financed by selling euros.

Sixty billion dollars of bonds sold to defend a currency. On the markets that figure means one thing: somebody is starting to spend reserves to hold up the picture.

Additional support for the price came from optimism that Iran and Oman are close to an agreement on reopening the Strait of Hormuz. If that happens, Middle East tensions and the inflationary pressure from high energy prices should ease.

Despite the rise, gold is still more than 20 percent below the record level of 5,589 dollars an ounce reached in late January. So this isn't a new record - this is a recovery after a fall.

Anyone who followed January's euphoria around gold can now work out the difference. That's the lesson that repeats every cycle: the metal everyone calls a "safe haven" is perfectly capable of dropping a fifth and not coming back for half a year.