* Gold market rebounds after hitting 5-week low on Thursday
* Stocks, dollar, industrial commods all steady after losses
* Coming up: U.S. non-farm payrolls data, due 1230 GMT
By Maytaal Angel and Jan Harvey
LONDON, July 2 (Reuters) - Gold rebounded 1 percent in
Europe on Friday as physical buyers in particular took advantage
of the previous day's price fall to buy into the market, with
traders now looking ahead to a key U.S. jobs report due later.
Spot gold <XAU=> was bid at $1,211.40 an ounce at 0959 GMT
against $1,198.65 late in New York on Thursday, having earlier
risen as high as $1,213.25 an ounce. U.S. gold futures for
August delivery <GCQ0> added $5.50 to $1,212.20 an ounce.
Gold recorded its biggest one-day fall in five months on
Thursday, sliding nearly 4 percent to a five-week low, as funds
sold bullion to cover losses in other markets like equities.
Afshin Nabavi, head of trading at MKS Finance, said demand
for physical gold at lower prices had been "very, very good".
"We had a big correction, but there has been no change of
the fundamentals, political or economic," he said. "It's a good
oportunity to take up some gold."
Other markets also recovered after Thursday's broad-based
sell-off. European shares bounced back from a three-day drop,
with miners higher after Australia dumped its proposed "super
profits" tax on the sector for a lower resource rent tax. []
The dollar <.DXY> steadied after steep losses the previous
day on growing concerns about the U.S. economy, while the euro
retreated after rising more than 2 percent on Thursday. []
Among other commodities, oil prices steadied near $73 a
barrel after sliding to a three-week low on Thursday, while base
metals like copper and zinc also bounced back from losses. []
[]
The financial markets are now looking ahead to the widely
anticipated U.S. June non-farm payrolls numbers due at 1230 GMT.
They are forecast to have dropped by 110,000 last month after
increasing 431,000 in May.
"Non-farm payrolls could change everything," said Nabavi.
"If it's as expected, (gold) could break $1,220."
INDIAN BUYING PICKS UP
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, eased a touch on
Thursday for the first time in nearly a month. They remain near
record levels, however. []
SPDR saw its biggest percentage inflow in the quarter to
end-June since the record-breaking first three months of 2009,
according to data released by the fund, though the pace of
growth slowed towards the end of the quarter. []
Analysts say demand for the metal as a haven has softened as
concerns over the financial health of the euro zone, the main
price driver for gold earlier in the year, have diminished.
"The dampening of this variable, at least in the short term,
has temporarily eroded some of gold's safe haven desirability,"
said UBS analyst Edel Tully in a note.
Lower prices attracted Indian buyers back to the market,
however, with gold traders in the world's biggest bullion
consumer picking up bargains ahead of a second round of
festivals starting August. []
"We priced in more than 300 kgs of gold since yesterday
evening," said an official with a state-run bank bullion dealing
bank. "Everybody is coming, be it domestic trader, exporter."
Among other precious metals, silver <XAG=> was at $18.03 an
ounce versus $17.75, platinum <XPT=> was at $1,509.50 versus
$1,501 while palladium <XPD=> was at $430 versus $430.50.
Platinum group metals markets are digesting news of flat
U.S. auto sales in June, as major automakers said they saw no
sign of the definitive second-half recovery the battered
industry had expected early in the year. []
(Additional reporting by Jan Harvey; Editing by Keiron
Henderson)
