* Gold investors take heart as stocks, dollar steady
* Bullion market largely ignores U.S. payrolls data
* No follow-through selling after sell-off seen bullish
* Coming up: Gold's uptrend, technical outlook in focus
By Frank Tang
NEW YORK, July 2 (Reuters) - Gold prices rebounded on
Friday on technical strength and bargain hunting after
double-dip recession fears triggered the biggest losses in six
weeks in the previous session.
Gold was supported by a stronger euro against the dollar
ahead of the U.S. Independence Day long weekend, even as crude
oil was on track to fall almost 10 percent for the week after a
larger-than-expected decline in June U.S. nonfarm payrolls.
Silver and platinum group metals also fell sharply for the
week on demand worries amid signs of slowing economic recovery
and lackluster U.S. auto sales.
Michael Daly, gold specialist at Chicago-based futures
broker PFGBest, said that gold was under pressure as deflation
talk was back in focus and as the metal had failed on several
occasions to break above the $1,260 to $1,270 levels.
"The worst maybe over at this point. The market takes a
beating, and, if we close higher than the $1,210 support area,
it may be a sign that gold has withstood the break and a signal
to reenter the market," Daly said.
Spot gold <XAU=> was at $1,207.20 an ounce at 2:12 p.m. EDT
(1812 GMT) against $1,198.65 late in New York on Thursday. U.S.
gold futures for August delivery <GCQ0> settled $1 higher at
$1,207.70.
Gold ended the week nearly 4 percent lower, following
Thursday's plunge to below $1,200 an ounce as a major technical
break sparked fund selling.
The bullion market initially ignored a report that showed
U.S. private payrolls rose only modestly in June and overall
employment fell for the first time this year.
"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 be hitting
bigger barricades and this worry must support gold," he said.
"If stocks stabilize, then expect the slow steady rise in
gold."
Gold investors took heart as U.S. stocks fell just 0.5
percent but were on track to record their worst week in two
months after jobs data underscored views the recovery is losing
steam. []
Meanwhile, gold continued to trade in close tandem with the
U.S. dollar, maintaining a link that was strongest at the
height of the European debt crisis in May, when the two were
generally rising. (Graphic http://link.reuters.com/nas55m)
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 had 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 toward the end of the quarter. []
Silver <XAG=> was at $17.72 an ounce versus $17.75,
platinum <XPT=> was at $1,496 versus $1,501, while palladium
<XPD=> was at $425 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. []
Prices at 2:38 p.m. EDT (1838 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCQ0> 1207.70 1.00 0.1% 10.2%
US silver <SIN0> 17.698 -0.062 0.0% 5.1%
US platinum <PLN0> 1499.20 -4.10 -0.3% 1.9%
US palladium <PAU0> 426.90 -2.15 -0.5% 4.4%
Gold <XAU=> 1209.35 10.60 0.9% 10.3%
Silver <XAG=> 17.73 -0.02 -0.1% 5.3%
Platinum <XPT=> 1496.00 -5.00 -0.3% 2.1%
Palladium <XPD=> 425.00 -5.50 -1.3% 4.8%
Gold Fix <XAUFIX=> 1201.50 -9.00 -0.7% 8.8%
Silver Fix <XAGFIX=> 17.98 -67.00 -3.6% 5.8%
Platinum Fix <XPTFIX=> 1508.00 8.00 0.5% 2.9%
Palladium Fix <XPDFIX=> 433.00 5.00 1.1% 7.7%
(Additional reporting by Maytaal Angel and Jan Harvey in
London; Editing by Walter Bagley)
