PRECIOUS-Gold rises after US job data, defies drop in oil

* Gold keeps gains, breaks ranks with tumbling crude
* More support from physical buyers needed to hit $1,800/oz
* U.S. nonfarm payrolls awaited on Friday
* Coming up: U.S. factory orders, jobless claims Thursday

(Adds details, updates market activity)
By Frank Tang
NEW YORK, Oct 3 (Reuters) - Gold edged up on Wednesday,
defying a drop in crude oil and a firmer dollar as encouraging
U.S. employment and service-sector data bolstered bullion's
investment appeal as an inflation hedge.
The metal held slim gains even though Brent crude futures
plunged more than 3 percent as disappointing economic reports
from Europe and China stoked concerns about demand.
Gold largely tracked Wall Street after the ADP National
Employment report showed U.S. companies added more jobs than
expected in September, while activity in the vast services
sector picked up, suggesting the U.S. economy remained on track
for modest growth.
The private-sector report did little to alter the view that
the Federal Reserve will keep interest rates low until it sees
signs of substantial economic progress. The Fed last month
announced a third round of asset buybacks known as quantitative
easing (QE3).
"Gold held up because QE3 is attracting new investors into
the market. People are exiting risk currencies such as the
Australian dollar and looking for a safe haven in the gold
market," said Phillip Streible, senior commodities broker at
futures brokerage R.J. O'Brien.
Also underpinning gold prices was simmering geopolitical
tension in the Middle East. Turkey said it struck targets in
Syria in response to a mortar attack that killed a woman and
four children in southeastern Turkey.
Spot gold was up 0.1 percent at $1,776.18 an ounce by
2:47 p.m. EDT (1847 GMT). It hit $1,791.20 this week, its
highest level since last November.
U.S. gold futures for December delivery settled up
$4.20 at $1,779.80 an ounce, with trading volume 30 percent
below its 250-day average, preliminary Reuters data showed.

ALL EYES ON U.S. PAYROLLS
Markets await the all-important September U.S. nonfarm
payrolls data due on Friday. The figures are keenly watched for
clues on how long the U.S. central bank will continue adding $40
billion a month to the financial system through purchases of
mortgage-backed securities.
Friday's report will likely show U.S. job growth improved
only slightly in September as businesses remained cautious out
of fear a sharp tightening of the government's budget could
deliver a big blow to the economic recovery early next year.

Credit Suisse analyst Tom Kendall said physical buyers would
need to be back in droves to take gold above $1,800 an ounce,
which is seen as the next upside target.
Among other precious metals, silver edged down 0.2
percent to $34.51 an ounce.
Platinum group metals were underpinned by worries about
labor unrest gripping South Africa's platinum mining sector.
Spot platinum rose 0.7 percent to $1,680.10 an ounce,
while palladium increased 0.4 percent to $649.60 an
ounce.
2:47 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold DEC 1779.80 4.20 0.2 1773.00 1784.00 106,982
US Silver DEC 34.69 0.021 0.1 34.515 34.930 29,434
US Plat OCT 1690.30 7.40 0.4 1669.90 1686.00 48
US Pall DEC 657.90 3.70 0.6 647.40 658.75 1,834

Gold 1776.18 2.04 0.1 1771.61 1781.70
Silver 34.510 -0.080 -0.2 34.490 34.840
Platinum 1680.10 11.10 0.7 1671.50 1686.24
Palladium 649.60 2.40 0.4 649.00 656.50

TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 117,244 168,487 173,602 16.42 0.16
US Silver 30,510 61,067 57,431 35.84 7.55
US Platinum 6,237 15,928 9,665 21.18 0.03
US Palladium 1,851 5,709 4,871

(Additional reporting by Rujun Shen in Singapore, Clare
Hutchison, Amanda Cooper and Veronica Brown in London; Editing
by John Wallace and Dale Hudson)