PRECIOUS-Gold extends retreat from record high, eyes US data

                                
 * Gold retreats further from record high as dollar recovers
                                
 * SPDR gold ETF sees biggest one-day outflow in July
                                
 * Coming up: U.S. Sept. non-farm payrolls data at 1230 GMT
                                
 
                                
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 By Jan Harvey
                                
 LONDON, Oct 8 (Reuters) - Gold fell below $1,330 an ounce on
Friday, extending its retreat from record highs, after a Federal
Reserve official was quoted as saying the pursuit of further
U.S. monetary easing was a "tough call", lifting the dollar.
                                
 Gold's near-10 percent rally from the end of August to
Thursday's record high at $1,364.60 an ounce had come largely on
the back of expectations for further U.S. quantitative easing,
which undermined the dollar.
                                
 Spot gold <XAU=> was bid at $1,329.45 an ounce at 1136 GMT,
against $1,332.65 late in New York on Thursday. U.S. gold
futures for December delivery <GCZ0> fell $3.10 to $1,331.90.
                                
 "On the quantitative easing side, (the Fed) has a lot of
optionality on how they implement it, what timing they're going
to give it, what volume they're going to give it," said Bank of
America-Merrill Lynch analyst Michael Widmer.
                                
 "There is certainly scope for them to do it on an ad-hoc
basis," he said. "The markets may have to some extent taken back
some of their immediate expectations (for) quantitative easing.
The economic data will play quite a big role in this."
                                
 The dollar has extended gains against the euro on Friday
after St. Louis Fed chief James Bullard, a voting member this
year on the Fed's rate-setting committee, told CNBC that the
Fed's upcoming meeting was a "tough call." [FRX/]
                                
 The U.S. currency has been dogged in recent weeks by
speculation that the Fed will move towards further quantitative
easing (QE). The unit fell 7.5 percent last month versus the
euro, its worst monthly performance since Dec. 2008.
                                
 The foreign exchange markets, which have a significant
impact on gold, are awaiting key U.S. non-farm payrolls data at
1230 GMT, and the annual meeting of the International Monetary
Fund and World Bank this weekend.
                                
 "The event risk of non-farm payrolls today feels especially
acute," said Credit Agricole in a note. "We have seen a big
sell-off in the dollar, and the vulnerability of the bears to
some upside surprise on the release must be rather pronounced.
                                
 "But it is also quite likely that the U.S. dollar response
to some drastically poor number would also be sizeable, helping
to quell any lingering doubts about the likelihood of further QE
by the Fed."
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 For a graphic on Reuters U.S. non-farm payrolls preview,
click on: http://link.reuters.com/nem47p
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 GOLD ETF HOLDINGS DROP
                                
 Meanwhile the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, reported a 13.4 tonne
outflow on Thursday, the biggest one-day drop in its holdings
since late July. [GOL/SPDR]
                                
 "It is striking that this price fall was accompanied by high
outflows from the SPDR Gold Trust," said Commerzbank in a note.
"Investors are clearly taking profits as prices fall."
                                
 "This is a sign, in our view, that the air gets more and
more thin at the current price level, and it also shows that the
swift rise in prices is probably largely due to short-term
oriented financial investors."
                                
 Nonetheless, technical analysts say gold is well-positioned
to extend its current record highs to new levels, although a
short-term correction may be seen to settle prices at higher
levels. [ID:nRTV151627]
                                
 Among other precious metals, silver <XAG=> was at $22.50 an
ounce against $22.52, well off the previous day's 30-year high
of $23.51 an ounce.
                                
 Holdings of the world's biggest silver-backed ETF, the
iShares Silver Trust <SLV>, climbed to a record 9,997.39 tonnes
on Thursday, reflecting strong investor demand for the metal.
                                
 Elsewhere platinum <XPT=> was at $1,681 an ounce against
$1,691.60, while palladium <XPD=> was at $578 against $579.15.
                                
 Investment firm Castlestone Management told Reuters in an
interview on Friday that platinum offers a better bet for
investors long-term than gold. [ID:nSGE697034]
 (Editing by Anthony Barker)