* Short-covering rally fizzles out, market returns to data,
* Strong jobs data on Friday could see further sharp losses
* Incoming Barrick Chairman would consider hedging again
By Veronica Brown
LONDON, Dec 5 Gold fell on Thursday as the
previous day's short-covering rally stalled, with investor
sentiment dogged by persistent speculation about the future of
U.S. monetary stimulus.
Even though the European Central Bank and Bank of England
are expected to continue holding off on any new policy action
later on Thursday, markets are fixated on U.S. economic
snapshots and what signal any data gives on when the Federal
reserve might start curbing its bond-buying programme.
Bullion saw its strongest gains in over a month on Wednesday
as investors proved over-extended on bets for prices to fall
further. The technical backdrop was more dominant than strong
U.S. private-sector hiring data and service industry growth in
the run up to Friday's key non-farm payrolls.
Spot gold was last quoted at $1,234.80 per ounce,
having earlier hit a session low of $1,229.69.
"The moves yesterday were a little bit extensive, especially
considering that we are now faced with a better prospect for Fed
tapering maybe to come already in December," Danske Bank analyst
"This is something that the gold market should react to in
the sense that this is going to be key in phasing out the era of
very low interest rates in the U.S."
Analysts polled by Reuters estimate that around 180,000 jobs
were added last month.
The bond-buying stimulus has strongly supported gold prices
as it has served to keep interest rates ultra low, an ideal
environment for non-yield bearing assets.
"Bullion remains at the mercy of US dollar sentiment and QE3
expectations," VTB said in a note to clients.
"Market participants are still expecting the dollar to
remain strong with little chance for a revival in bullion
sentiment in the near future without significant physical
On the mining front, the incoming chairman of Barrick Gold
Corp said on Wednesday he would consider a hedging
strategy, given volatility in the price of gold, but this did
not mean Barrick was poised to change tack on the issue.
"As an outsider, I always thought it made great sense to
hedge, given the background I come from. I can't imagine why you
wouldn't look at that seriously all the time," Thornton told
reporters at Barrick's headquarters in Toronto.
Holdings in SPDR Gold Trust GLD, the world's largest
gold-backed exchange-traded fund, fell 2.70 tonnes to 838.71
tonnes on Wednesday - their lowest since early 2009. GOL/ETF.
In other metals silver followed gold's lead, dropping
1 percent to $19.48 per ounce. Platinum lost 0.2 percent to
$1,365, while palladium also shed 0.2 percent to $723