PRECIOUS-Gold eases for 2nd day, U.S. jobs data eyed

Fri Jul 5, 2013 3:15am EDT

* Gold heads for 1 pct weekly gain
    * Dollar rallies after ECB commits to low rates
    * Coming up: U.S. nonfarm payrolls at 1230 GMT

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, July 5 (Reuters) - Gold slipped on Friday as
Asian stocks and the dollar gained after the European Central
Bank said it could cut interest rates further, but investors
were waiting for U.S. jobs data later in the day for stronger
cues.
    Bullion has been trading in thin volumes this week as
investors were reluctant to bolster positions ahead of the U.S.
Independence Day holiday on Thursday and the nonfarm payroll
report on Friday.
    The payrolls data at 1230 GMT will give a better idea of
when the Federal Reserve will begin tapering its $85 billion
monthly bond-buying stimulus. Chairman Ben Bernanke has said the
scale-back could begin in the next few months.
    "The market is looking towards payrolls for direction," said
Victor Thianpiriya, commodities analyst at Australia and New
Zealand Banking Group.
    "A downside surprise to the nonfarm payroll numbers will
result in sharp short-covering as the market remains short."
    ANZ is expecting nonfarm payrolls to increase by 140,000,
while the market consensus is at 165,000. 
    Spot gold had dropped 0.6 percent to $1,242.16 an
ounce by 0650 GMT. U.S. gold was down nearly $11 at
$1,241.30.
    Still, gold is headed for a weekly gain of about 1 percent,
compared with a 5 percent drop last week, when it fell to
$1,180.71 - its lowest since August 2010.
    Asian stocks rose on Friday, while sterling hit a five-week
low, after two of Europe's most important central banks
surprised the market by assuring investors they were in no hurry
to wind down stimulus. 
    The European Central Bank left its key interest rates
unchanged on Thursday and said it would keep interest rates at
record lows for an extended period and may cut them further,
responding to turbulence caused by the Fed's exit plan. 
    Gold posted its biggest quarterly loss on record in
April-June after Bernanke said last month the U.S. economy was
recovering strongly enough for the central bank to begin pulling
back on its stimulus in the next few months and potentially end
it by mid-2014.
    Rapid outflows from gold exchange traded products (ETPs) and
softer-than-expected physical demand are keeping gold prices
under pressure.
    Outflows from gold ETPs totalled $4.1 billion in June and
$28.2 billion year-to-date, according to data from BlackRock.
 
    Indian consumption has fallen since the government imposed
new import restrictions, while Chinese buyers are waiting on
sidelines for prices to fall further, or at least stabilize. 
    "Chinese premiums are holding up and we expect them to be
strong buyers if we get a dip back below $1,200," ANZ's
Thianpiriya. 
  Precious metals prices 0650 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1242.16   -7.03   -0.56    -25.82
  Spot Silver        19.19   -0.32   -1.64    -36.62
  Spot Platinum    1330.24   -8.26   -0.62    -13.34
  Spot Palladium    670.25   -4.25   -0.63     -3.14
  COMEX GOLD AUG3  1241.30  -10.60   -0.85    -25.93        60960
  COMEX SILVER SEP3  19.17   -0.54   -2.72    -36.76
  Euro/Dollar       1.2898
  Dollar/Yen        100.28
 
  COMEX gold and silver contracts show the most active months
 
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford and
Tom Hogue)
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