(Updates prices, rewrites throughout)
* Central bank easing boosts dollar, pressures gold
* Spot gold may fall to $1,586/oz -technicals
* Coming Up: U.S. June non-farm payrolls; 1230 GMT
By Maytaal Angel and Rujun Shen
LONDON, July 6 Gold prices edged down on Friday
as a stronger dollar reduced European demand for the metal and
as investors waited for U.S. jobs data to help gauge the health
of the world's top economy.
Some traders said Thursday's better-than-forecast private
U.S. employment data indicated that the non-farm payroll numbers
due on Friday could also be robust, dampening hopes for further
quantitative easing and hurting appetite for gold, traditionally
seen as a hedge against inflation.
Spot gold was down at $1,594.96 an ounce at 1133 GMT
from $1,604.33 at Thursday's close and was on course for a
weekly fall of 0.2 percent.
"I would certainly highlight yesterday's ADP (private sector
employment) number. If that means we're going to get good
non-farm payrolls this afternoon, the likelihood of (a third
round of U.S.) quantitative easing diminishes significantly,
which is very bad for gold," Natixis analyst Nic Brown said.
Quantitative easing by central banks devalues paper
currencies and boosts appetite for hard assets such as gold.
The U.S. gold futures contract for August delivery
edged down 0.85 percent to $1,595.50.
Adding pressure to gold, the dollar stayed close to
five-week highs against the euro on investor disappointment that
the European Central Bank did not follow its rate cut Thursday
with bolder easing measures.
The ECB cut followed on from similar action by the Chinese
and UK central banks, which together only served to signal a
growing level of alarm about the world economy, although
suggestions of coordinated cuts were played down.
"While the ECB cut was near-term bearish for gold as it
weakened the euro, it may be more bullish longer term. Added
global liquidity with policy easing measures from the euro zone,
China, and the Bank of England may stimulate demand for hard
assets, including gold," said HSBC in a note.
Key to the question of added global liquidity, however, is
the U.S. jobs report due at 1230 GMT.
Thursday's data showed U.S private employers had stepped up
hiring in June and that the number of Americans filing new
claims for jobless benefits last week fell by the most in two
months, hopeful signs for the struggling labour market.
A Reuters poll showed non-farm payrolls were expected to
expand by just 90,000 jobs in June.
PHYSICAL BUYING SUBDUED
There was little support for gold from the physical market,
where bullion demand remained subdued after prices rose above
$1,600 and potential sellers eyed $1,620 or above, dealers said.
"The current price level isn't attractive enough to lure
buyers back," said Peter Tse, director at ScotiaMocatta in Hong
Kong, adding that jewellers were likely to enter the market if
prices dropped to $1,550 to $1,560.
Technical analysis suggested that spot gold could fall to
$1,586 an ounce during the day, Reuters market analyst Wang Tao
In another sign of weak physical demand, Hong Kong shipped
75,456 kg of gold to mainland China in May, down 26 percent from
the previous month, trade data showed.
In other precious metals, silver dropped 0.87 percent
to $27.42 an ounce, while platinum eased 0.64 percent to
$1,459.75 an ounce, and palladium fell 0.63 percent to
Holdings of the largest gold-backed exchange-traded-fund
(ETF), New York's SPDR Gold Trust and that of the largest
silver-backed ETF, New York's iShares Silver Trust
remained unchanged on Thursday from Wednesday.
(Reporting by Maytaal Angel; editing by Jason Neely and Jane