Gold slips ahead of U.S. data, physicals cushion falls
SINGAPORE (Reuters) - Gold slipped on weaker oil prices on Friday and investors may be careful about taking large positions ahead of the release of non-farm payrolls data which will offer clues on the direction of the U.S. economy.
But lower prices spurred activity in the physical sector and light buying from India, the world's largest gold consumer, suggested jewelers has started stocking up ahead of Hindu festivals which culminate with Diwali in October, dealers said.
Gold dropped to $909.70/910.70 an ounce from $913.45/914.65 an ounce late in New York on Thursday, when it rose more than $6 on a falling U.S. dollar.
"I think the market still has a short-term reprieve on dollar weakness but really that upward trend has simply slowed again," said Mark Pervan, senior commodities analyst with ANZ in Melbourne.
He pegged key support at $900 an ounce, which if broken could take the price down to $850 -- a level last seen in mid-June. "I think we are seeing a pullback on the caution seen in the oil market at the moment," he said.
Gold has struggled to sustain gains since rallying to a four-month high of $987.75 an ounce in mid-July, driven by declines in oil and a recovery in the dollar that robbed the metal of some of its safe haven appeal.
The metal is well below March's record high of $1,030.80.
The euro slipped to $1.5559. Oil lost 75 cents to $123.33 a barrel, extending Thursday's losses. A Reuters poll showed the U.S. economy probably suffered its seventh consecutive month of job losses in July as companies continued to cut workers in the face of the worst housing slump since the Great Depression.
"There's very good physical demand from Indonesia and Thailand. India has also bought quite a fair bit. Premiums are still steady but they may improve as demand picks up," said a bullion dealer in Singapore.
Premiums for gold bars were unchanged from last week at 60 U.S. cents an ounce to the spot London prices in Singapore.
Spot platinum fell to $1,720.00/1,740.00 an ounce from $1,749.50/1,769.50 late in New York. It struck a lifetime high $2,290 in early March after a power shortage in main producer South Africa disrupted mining and sparked supply worries. "At this moment there's no actual demand from the automobile or jewelry sectors. Nothing," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.
"There's only investment demand. That's not so important," he said.
Investment accounts for around 2 percent of total demand.
New York gold futures fell $3.9 to $918.80 an ounce.
Euro/Dollar 1.5574
Dollar/Yen 107.36
TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Michael Urquhart)
