* Euro slips vs dollar after U.S. data but lifts from lows
* Report shows U.S. lost fewer jobs than expected in Feb
* Oil prices rise to 7-week high after U.S. payrolls data
(Updates prices, adds comment, U.S. data)
By Jan Harvey
LONDON, March 5 (Reuters) - Gold swung back into positive
territory on Thursday as investors took advantage of the metal's
fall below $1,130 an ounce, buying at lower prices after U.S.
jobs data and as the euro recovered from lows.
The metal hit a session low of $1,126.60 an ounce as better
than expected payrolls data lifted the dollar, but quickly
bounced back as bargain hunting emerged and the euro recovered
its initial losses. Rising oil prices also helped gold.
Spot gold <XAU=> was bid at $1,134.15 an ounce at 1426 GMT,
against $1,131.45 late in New York on Thursday. U.S. gold
futures for April delivery <GCJ0> on the COMEX division of the
New York Mercantile Exchange rose $1.80 to $1,134.70 an ounce.
"The better-than-expected non-farm payrolls initially took
(gold) lower as the market moved in tandem with the stronger
dollar," said Saxo Bank senior manager Ole Hansen.
"The lows from yesterday held and it looks like the upside
momentum is still intact," he added. "The view among many is
still that they worry about missing the boat and there has been
buying into the break through $1,131."
The hotly-anticipated payrolls report showed U.S. employers
cut a smaller-than-expected 36,000 jobs in February, leaving
investors hopeful that the labour market was on the brink of
creating jobs. The unemployment rate was steady at 9.7 percent
The dollar initially rallied on the news as optimism over
the prospects for an economic recovery was boosted, but the euro
<EUR=> quickly bounced off its session low of $1.3529 to steady.
Analysts are optimistic that gold will stay firm in the
medium term, boosted by instability in the currency markets,
concern over sovereign debt, persistently low interest rates and
prospects for inflation later this year and into 2011.
Appetite for physical gold in key markets such as India and
Turkey is also showing signs of recovery after coming under
pressure in 2009 as prices rose to record levels.
OIL HITS 7-WEEK HIGH
Among other commodities, crude oil climbed more than 1
percent to a seven-week high above $81 a barrel after the U.S.
jobs data and on signals China will maintain its economic
stimulus measures. []
Gold tends to track crude prices, as the metal can be bought
as a hedge against oil-led inflation.
Among other precious metals, silver <XAG=> was bid at $17.24
an ounce against $17.10, tracking gains in gold.
Record demand drove the U.S. Mint's silver coin sales 40.2
percent higher in the first two months of the year to 5.643
million ounces from 4.025 million ounces, data released on the
mint's website showed. []
The world's largest silver-backed exchange-traded fund, the
iShares Silver Trust <SLV>, said its holdings fell 61.02 tonnes
from a day before to 9,412.43 tonnes on March 4. []
Platinum <XPT=> was at $1,573.50 an ounce against $1,576.50,
while palladium <XPD=> was at $464 against $458.50.
Palladium has outperformed other precious metals this year,
rising 14 percent compared to a 7.3 percent rise for platinum,
3.5 percent for gold and 2.4 percent for silver.
"Palladium prices were notably strong, supported by spread
trading between platinum and palladium," said HSBC in a note.
"This is based in part on recent auto sales improvement
regions that are more reliant on gasoline engines -- i.e. North
America and China -- as compared to diesel engines, which are
predominantly sold in Europe."
Gasoline-powered vehicles use a greater percentage of
palladium and less platinum than diesel engines, which require
more platinum and less palladium.
(Editing by Keiron Henderson)
