UPDATE 1-Gold up ahead of U.S.payrolls data, off 3-week low

(Updates prices)

By Lewa Pardomuan

SINGAPORE, June 6 (Reuters) - Gold firmed on Friday on
bargain hunting and rising oil prices, having fallen to its
lowest level in three weeks, but investors maybe careful about
taking large positions ahead of U.S. payrolls data.

Other precious metals tracked gold's gains, with platinum
holding above $2,000 as worries about supplies lingered. Tokyo
platinum futures also firmed on a weaker yen.

Gold XAU= rose to $878.90/880.10 an ounce from
$874.55/875.95 an ounce late in New York on Thursday, when it
hit a low of $864.45 on chart-based selling -- its lowest level
since May 15.

"I think for the moment, the U.S. dollar remains somewhat
fragile. I think there's still a possibility for gold to get
higher in the near term," said David Moore, a commodity analyst
at the Commonwealth Bank of Australia in Sydney.

The euro was hardly changed at $1.5584 EUR= after earlier
hitting a high of $1.5605, rebounding from Thursday's
three-week low of $1.5365.

In theory, a weaker dollar lifts gold's appeal as an
alternative investment while firm oil prices raise fears of
inflation, boosting the metal's safe-haven appeal.

Oil CLc1 extended gains to around $128 a barrel after the
European Central Banksignalled it may raise interest rates,
pushing down the dollar. <O/R>

"If we can break $880 and stay above that, we will have a
chance to visit $900," said Ronald Leung, director of Lee
Cheong Gold Dealers in Hong Kong, referring to a level last
seen last week.

"I think we are still in a range of $850 to $900 for the
time being," said Leung, adding that dealers awaited the
payrolls data to offer direction to bullion.

The median of forecasts from analysts polled by Reuters is
for the number of U.S. nonfarm payrolls to have shrunk by
58,000 last month from a contraction of 20,000 in April.

Gold futures for June delivery GCM8 on the COMEX division
of the New York Mercantile Exchange added $6.8 an ounce to
$882.3 an ounce.

The most active Tokyo platinum contract for April 2009
delivery <0#JPL:> on the Tokyo Commodity Exchange ended the
morning session 164 yen per gram higher at 6,797 yen, mainly
driven by firm oil prices and strength in the cash market.

Spot platinum XPT= rose to $2,022.00/2,042.00 ounce from
$2,000.50/2,020.50 an ounce -- off a three-week low $1,946 hit
last week.

"I think there are still worries about deficit. There
seemed to be buying interest at below $2,000," said Leung of
Lee Cheong Gold Dealers.

Platinum may spike to a record high of $2,500 an ounce this
year and the market is expected to close 2008 in a significant
deficit due to production shortfalls and strong metal demand,
Johnson Matthey (JMAT.L) has said.

Silver XAG= edged up to $17.14/17.22 an ounce from
$17.12/17.18 an ounce. Spot palladium XPD= rose to
$424.00/432.00 an ounce from $421.00/429.00 an ounce.
Precious metals prices at 0248 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 878.75 1.40 +0.16 5.53
Spot Silver 17.11 -0.01 -0.06 15.84
Spot Platinum 2024.50 26.50 +1.33 33.19
Spot Palladium 424.50 0.50 +0.12 15.35
TOCOM Gold 3023.00 26.00 +0.87 -1.21
14319
TOCOM Platinum 6797.00 164.00 +2.47 27.31
12158
TOCOM Silver 589.00 12.40 +2.15 8.87
312
TOCOM Palladium 1488.00 13.00 +0.88 10.14
408
Euro/Dollar 1.5585
Dollar/Yen 106.15
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Louise Heavens)