(Adds fresh quotes, updates prices and details)
* Markets eye U.S. nonfarm payroll data due at 1330 GMT
* Palladium, platinum set for biggest weekly fall since Nov
By K. Sathya Narayanan and Swati Verma
March 8 (Reuters) - Gold rebounded on Friday as the dollar eased slightly and worries about a sharp global economic slowdown after the European Central Bank (ECB) slashed growth outlook were aggravated by weak Chinese data, boosting demand for the safe-haven metal.
Spot gold rose 0.6 percent to $1,292.52 per ounce as of 1305 GMT, while U.S. gold futures gained 0.5 percent to $1,292.90.
“There are still concerns about the China economy especially when the global demand is weakening and we don’t see a silver lining of immediate recovery in the eurozone as well,” said Margaret Yang, market analyst with CMC Markets, Singapore.
The dollar’s decline and weaker equity markets have sent gold prices higher, she said, adding that a slowdown in growth and increased political uncertainties should keep prices supported.
The dollar index was down 0.2 percent, having hit a near three-month peak in the previous session after the ECB postponed an interest rate hike until 2020. Asian stocks also shuddered lower after shockingly weak export data from China heightened market fears about global growth.
“ECB’s decision echoed U.S. dollar strength, and we saw risk aversion... I don’t think gold is supported in the longer term,” said Ilya Spivak, a senior currency strategist at DailyFX.
“We have seen a substantial decline in prices since mid-February and the reason for that is the dollar. As we saw risk aversion, we also see haven demand for U.S. dollar outpacing the influence of yields.”
To gauge the strength of the U.S. economy, investors are now waiting for the U.S. nonfarm payroll report later in the day, which could signal the future path of Federal Reserve’s monetary policy.
Investors are also focused on trade talks between the United States and China. U.S. President Donald Trump on Wednesday said that trade talks with China were moving along well and predicted either a “good deal” or no deal.
“Strong non-farm payrolls results and further positive developments in U.S.-China trade talks are likely to drive gold down to $1,250/oz, which remains a key support level for gold,” OCBC Bank analysts said in a note.
Elsewhere, palladium slipped 0.7 percent to $1,516.87 per ounce and was on track for its biggest weekly decline since the week ended Nov. 23.
Silver gained half a percent to $15.09, after slipping to its lowest since late December in the previous session.
Platinum was up 0.3 percent at $815.58 per ounce, after touching its lowest since Feb. 19 at $806.50 earlier. It was down about 4.7 percent for the week, its biggest percentage decline since end November. (Reporting by K. Sathya Narayanan and Swati Verma in Bengaluru; Editing by Rashmi Aich and Shreejay Sinha)