* Gold firms after soft June payrolls numbers
* 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 rose on Friday after data
showed U.S. employment fell for the first time this year in
June, with bargain hunting after the previous day's price drop
also helping lend support to the market.
Spot gold <XAU=> was bid at $1,207.20 an ounce at 1332 GMT
against $1,198.65 late in New York on Thursday. U.S. gold
futures for August delivery <GCQ0> rose $1.60 to $1,208.30.
"The market seems to be giving a muted reaction to the
non-farm (payrolls) data, which largely came in line with
expectations," said Pradeep Unni, senior analyst at Richcomm
Global Services.
"The U.S.-led global economic recovery seems to hitting
bigger barricades and this worry must support gold," he added.
"If stocks stabilize, then expect the slow steady rise in gold."
But support for the metal must hold at $1,178, he added.
European shares pared gains on Friday afternoon and U.S.
stocks opened little changed as worse-than-expected U.S.
non-farm payroll data fuelled fears over the global economic
recovery. []
The report showed U.S. private payrolls rose less than
expected in June and overall employment fell for the first time
this year as thousands of temporary census jobs ended, showing
the recovery is failing to gain traction. []
The dollar fell against the euro <EUR=>, meanwhile,
extending the previous day's steep losses on concerns over the
pace of recovery. []
In the medium term, fears for a double-dip recession could
fuel demand for gold as a haven from risk, analysts said.
But in the short run such buying 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.
ETF HOLDINGS EASE
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. []
Lower prices are attracting some gold buyers back to the
market on Friday, however. 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."
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.
Thursday's price dip also attracted Indian buyers back to
the market, 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 $17.83 an
ounce versus $17.75, platinum <XPT=> was at $1,508 versus $1,501
while palladium <XPD=> was at $434.50 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. []
(Editing by Keiron Henderson)
