* Bullion rallies $30 or 2 pct from earlier two-week low
* Likely faces strong resistance from 50-day average
* U.S. nonfarm payrolls growth slows but jobless rates down
* Coming up: US ISM non-manufacturing index Monday
(Updates prices, market details and comment, 2nd byline,
By Frank Tang and Clara Denina
NEW YORK/LONDON, Aug 2 Gold rose on Friday
following a sharp rebound from earlier lows, after mixed signals
from the U.S. nonfarm payrolls report suggested that the Federal
Reserve could be more cautious about drawing down its economic
Bullion still posted a near 2 percent loss for its biggest
weekly drop in five weeks, weighed down by a dollar rally.
Gold initially fell to a two-week low at $1,280 an ounce as
encouraging U.S. gross domestic product and factory activity
data earlier in the week reduced the metal's appeal as an
It jumped about $30 or 2 percent from its session low after
government data showed U.S. employers slowed their pace of
hiring in July but the jobless rate fell anyway, easing fears
that the U.S. central bank might imminently reduce its $85
billion monthly bond buyback stimulus.
The jobs data sparked a sharp decline in U.S. Treasury bond
yields, seen as measures of short-term interest rates.
"Gold seems to be more sensitive to signs of tapering than
any other assets. Certainly, the direction of interest rate is a
very crucial thing for gold at this point," said Bill O'Neill,
partner of commodities investment firm LOGIC Advisors.
Spot gold was up 0.l percent at $1,309.80 an ounce by
2:31 p.m. EDT (1831 GMT), having earlier traded as low as
Bullion posted a 1.8 percent weekly decline for its first
weekly drop in four weeks.
U.S. gold futures for December delivery settled down
70 cents at $1,310.50 an ounce, with trading volume about 10
percent below its 30-day average, preliminary Reuters data
Gold staged a strong recovery as the dollar slumped against
the euro and the yen, and benchmark U.S. Treasury yields
fell back below 2.7 percent.
Until Friday, the metal had ended lower in the last four
days. Earlier in the week, the Fed offered no indication that it
was preparing to reduce its monetary stimulus at its next policy
meeting in September.
CHART RESISTANCE, ETF HOLDINGS DOWN
On chart, gold is likely to running into strong technical
resistance at $1,320 an ounce near its 50-day average, analysts
Mark Arbeter, chief technical strategist at S&P Capital IQ,
said that there could be a small pullback before a rally to over
$1,450 an ounce, citing favourable futures positioning by
speculators and overly bearish sentiment.
As a gauge of investor interest, holdings in SPDR Gold Trust
, the world's largest gold-backed exchange-traded fund,
fell 0.7 percent to 921.05 tonnes on Thursday, hitting fresh
Outflows from the top eight gold ETFs tracked by Reuters
have totalled 19 million ounces so far this year, or about $25
billion at current prices.
Among other precious metals, silver rose 1.4 percent
to $19.86 an ounce. Platinum was up 0.4 percent at
$1,441.99 an ounce and palladium eased 0.5 percent to
$727.72 an ounce.
2:31 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold DEC 1310.50 -0.70 -0.1 1282.40 1318.00 178,790
US Silver SEP 19.912 0.288 1.5 19.185 20.265 54,546
US Plat OCT 1451.50 7.70 0.5 1415.80 1455.90 10,553
US Pall SEP 729.70 -2.15 -0.3 721.15 736.00 2,819
Gold 1309.80 1.96 0.1 1282.89 1317.90
Silver 19.860 0.280 1.4 19.250 20.270
Platinum 1441.99 5.49 0.4 1419.00 1450.25
Palladium 727.72 -3.78 -0.5 725.27 732.97
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 193,020 218,053 187,132 25.48 1.39
US Silver 58,266 54,596 55,303 30.67 -0.67
US Platinum 10,702 13,261 12,489 23.37 0.00
US Palladium 3,060 4,131 5,353
(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by David Evans and Grant McCool)