* U.S. crude oil futures fall below $50/barrel
* China’s central bank aims to combat a growth slowdown (Updates prices, adds comment)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, Feb 4 (Reuters) - Gold pared gains after rising 1 percent on Wednesday, losing its safe haven appeal on falling oil prices after the precious metal initially garnished support from China’s central bank’s move to stimulate its flagging economy.
Spot gold dropped more than $4 an ounce within one minute shortly after data showed U.S. crude oil stocks rose to a record high and the futures market later fell below the key $50 a barrel mark.
Spot gold rose to a session high of $1,271.80 an ounce and was up 0.5 percent at $1,265.66 an ounce by 3:15 p.m. EST (2015 GMT), after posting its fourth drop in five sessions, down 1.2 percent, on Tuesday.
“This is more of a bounce back from yesterday and consolidation ahead of Friday’s jobs report as the focus is really going to continue to be the likelihood of a Fed rate hike in the third quarter of this year,” said David Meger, director of metals trading for High Ridge Futures in Chicago.
U.S. gold for April delivery settled up 0.3 percent at $1,264.50 an ounce.
Gold was initially lower but turned higher after China’s central bank cut the amount of cash that banks must hold as reserves, the first industry-wide cut since May 2012, adding more liquidity to help boost bank lending and combat a growth slowdown.
“Gold’s rally this year has partly been based on this premise that central banks are losing their fight against slower growth and deflation and are having to take even more radical monetary policy measures and this plays into that narrative,” Macquarie analyst Matthew Turner said.
Further monetary easing favors gold as ultra-low interest rates encourage investors to put money into non-interest-bearing assets instead. But while major economies such as China and Europe continue to pump more money into their systems, the United States is moving towards a tightening cycle.
The gold market shrugged off comments from Cleveland Federal Reserve President Loretta Mester who said the Federal Reserve should likely raise interest rates in the first half of this year.
U.S. non-farm payroll data, usually considered an important gauge of the strength of the economy will be released on Friday.
Spot silver rose 0.8 percent to $17.42 an ounce. Palladium gained 0.6 percent to $786.98 an ounce and platinum was up 0.7 percent at $1,238.40 an ounce. (Additional reporting by Manolo Serapio Jr in Singapore; Editing by William Hardy and Grant McCool)