* Gold snaps two-day rise, posts biggest daily drop in week
* Signs of economic recovery pressure gold's safe-haven bids
* SPDR Gold Trust stems outflow, Asian gold premiums down
* Coming up: U.S. nonfarm payrolls report Friday
(Updates throughout, changes byline, dateline, previous LONDON)
By Frank Tang
NEW YORK, March 7 Gold fell on Thursday after
the European Central Bank and the Bank of England did not hint
at more economic stimulus, and as encouraging U.S. jobless
claims data fuelled optimism about the upcoming nonfarm payrolls
The metal's 0.5 percent decline snapped a two-day winning
streak, marking its biggest daily decline in a week. Bullion
dropped after the ECB gave no clear hints of further monetary
easing and the BOE decided not to restart its gilt purchases
The gold market now turns its focus to Friday's
all-important U.S. nonfarm payrolls report for February. Signs
of continuing recovery in the job market could prompt the
Federal Reserve to halt its economic stimulus earlier than
"Gold is under pressure as the overall numbers have started
to pick up in the economy. If we see job growth on Friday, the
metal may continue to weaken," said Frank McGhee, head precious
metals trader at Integrated Brokerage Services LLC.
Spot gold was down 0.5 percent at $1,575.44 an ounce
by 2:34 p.m. EST (1934 GMT).
U.S. gold futures for April delivery settled up 20
cents at $1,575.10, with trading volume about 10 percent below
average, preliminary Reuters data showed.
Gold's safe-haven status was also dented after the U.S.
House of Representatives passed a bill to avert a possible
government shutdown for now.
Strong U.S. data earlier this week, including a
better-than-expected private-sector jobs report, has brightened
the mood in the markets and lifted the Dow Jones industrial
average to record highs for a third consecutive session
"Every time we've seen a strong number in recent weeks, it's
almost as if someone's been pressing the sell button (on gold)
automatically," said Ole Hansen, senior manager at Saxo Bank.
U.S. job growth likely was moderate in February as higher
taxes and fears of deep government spending cuts made employers
cautious, suggesting there was still not enough momentum in the
economy for the Fed to scale back its stimulus.
Silver dropped 0.9 percent to $28.76 an ounce.
SPDR GOLD STEMS OUTFLOW
Underpinning gold prices were hopes that recent sharp
outflows from gold-backed exchange-traded funds appeared to have
Holdings of SPDR Gold Trust, the world's largest gold
ETF, stood unchanged on Wednesday after 11 straight sessions of
Investors pulled $5.6 billion from gold exchange-traded
products (ETPs) in February after a poor performance by the
yellow metal, but appetite for riskier, growth-oriented
industrial metals ETPs remained intact.
In the physical market, buyers in China slowed their robust
purchases of gold as purchases made in previous weeks started to
arrive, easing a supply shortage.
China's domestic gold prices had been trading at premiums of
over $20 above international prices in the past few days, but
that spread shrank to just over $10 on Thursday, and traders
said the premiums could fall further.
In platinum group metals, platinum was up 0.3 percent
at $1,589.74 an ounce and palladium climbed 1.5 percent
2:34 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold APR 1575.10 0.20 0.0 1574.00 1584.90 126,608
US Silver MAY 28.808 0.005 0.0 28.740 29.085 28,273
US Plat APR 1595.10 15.30 1.0 1585.00 1601.20 9,077
US Pall JUN 759.05 19.00 2.6 744.00 761.55 4,426
Gold 1575.44 -7.87 -0.5 1575.45 1585.39
Silver 28.760 -0.250 -0.9 28.780 29.060
Platinum 1589.74 5.49 0.3 1587.00 1598.25
Palladium 755.47 11.25 1.5 745.50 758.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 156,782 202,894 175,099 14.42 -0.25
US Silver 34,812 64,013 52,861 21.83 -1.64
US Platinum 10,087 13,452 10,810 17.79 -1.14
US Palladium 4,800 9,031 5,249
(Additiona reporting by Natalie Huet in London; Editing by