PRECIOUS-Gold drops from 11-month high after US payrolls

* Gold pressured after US jobless rate hits near-4 year low
* Falling crude prices also lessen inflation bid
* S.African mine labor unrest fails to boost platinum
* Coming up: U.S. Employment Index Tuesday

(Adds details, updates market activity)
By Frank Tang
NEW YORK, Oct 5 (Reuters) - Gold hit an 11-month high early
o n F riday then retreated to end lower after bullion's appeal as
an inflation hedge was dampened by a surprising drop in U.S.
unemployment rate to a four-year low.
Weaker crude oil futures also weighed on the precious metal
after the Labor Department said the U.S. unemployment rate
dropped to 7.8 percent in September, the lowest President Barack
Obama took office and well under the 8.2 percent expected by
economists.
Open interest in U.S. gold futures rose to a one-year high
while bullion held by the No. 1 gold exchange-traded fund SPDR
Gold Trust climbed to a record, underscoring renewed
investor focus in trading the precious metal.
U.S. crude futures' second sharp losses in three days also
prompted some gold investors to cut bullish bets after bullion
failed to break above $1,800 an ounce following several attempts
this week.
"The payrolls data took some immediacy out of any additional
Fed stimulus action. The falling premium in crude is also taking
a big bite out of the inflation bid," said Frank McGhee, head
precious metals trader of Integrated Brokerage Services Llc.
"Gold at $1,800 might look a bit more distant now," McGhee
said.
Spot gold was down 0.6 percent at $1,777.19 an ounce
by 2:19 p.m. EDT (1819 GMT), having earlier hit $1,795.69 the
highest price since Nov. 9, 2011.
For the week, the metal showed a 0.4 percent gain following
nearly flat performance in the previous two weeks.
U.S. COMEX gold futures for December delivery
settled down $15.70 at $1,780.80, with volume around 10 percent
below its 30-day average, preliminary Reuters data showed.
Silver fell 1.5 percent to $34.42 an ounce.
Analysts said the U.S. data showed the world's largest
economy was not heading back into a recession, and had
encouraged investors to take on riskier bets with equities up.
The payrolls report had been keenly watched for clues on how
long the Fed will continue adding $40 billion a month to the
system through purchases of mortgage-backed securities.
Investors are looking at gold as their top commodities
choice and a safe-haven against what may be a turbulent fourth
quarter, given a possibility that the so-called U.S. "fiscal
cliff" of automatic spending cuts and tax increases will shrink
the economy and lead to more money printing.
Major gold ETFs monitored by Reuters added over 0.4 million
ounces of bullion on Thursday, as SPDR Gold Trust reported
record holdings of 1,333.44 tonnes of bullion.

S.AFRICAN MINING STRIKES
Mining strikes in South Africa, accounting for 80 percent of
the world's platinum reserves, failed to support prices among
the platinum group metals.
Anglo American Platinum, the world's top producer
of platinum, said it had fired 12,000 workers who had
participated in a three-week illegal strike. Amplats said the
work stoppage had cost it 39,000 ounces in lost
output.
Spot platinum eased 0.3 percent on the day at
$1,703.49 an ounce, after reaching a seven-month high earlier in
the session. The metal still posted a weekly rise of more than 2
percent.
Spot palladium was down 1.2 percent to $660.50 an
ounce.
2:19 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold DEC 1780.80 -15.70 -0.9 1774.50 1798.10 138,001
US Silver DEC 34.572 -0.529 -1.5 34.315 35.145 38,080
US Plat OCT 1703.30 -17.90 -1.0 1705.60 1731.20 13
US Pall DEC 663.20 -11.55 -1.7 660.45 673.55 2,838

Gold 1777.19 -11.36 -0.6 1773.56 1795.69
Silver 34.420 -0.510 -1.5 34.420 35.080
Platinum 1703.49 -5.81 -0.3 1703.75 1726.49
Palladium 660.50 -8.10 -1.2 663.02 671.00

TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 143,624 167,951 173,609 16.24 -0.53
US Silver 38,991 60,187 57,280 35 7.00
US Platinum 8,461 15,738 9,660 19.51 -0.66
US Palladium 2,859 5,497 4,864

(Additional reporting by Clare Hutchison in London and Rujun
Shen in Singapore; Editing by Marguerita Choy and Alden Bentley)