* Gold's biggest weekly loss since May on economic optimism
* U.S. December nonfarm payrolls rise less than expected
* Indian gold imports seen jumping 64 pct in 2010
* Coming up: U.S. wholesale inventory on Tuesday
(Recasts, updates prices to market close)
By Frank Tang
NEW YORK, Jan 7 (Reuters) - Gold dipped on Friday, as
disappointing U.S. job growth failed to revive safe-haven
demand following a raft of strong economic data, and bullion
notched its biggest weekly decline since May.
Bullion declined for a fifth day, its longest losing streak
in seven months, although it closed up from a six-week low
after data showed U.S. employers hired fewer workers than
expected in December, and a surprise fall in the unemployment
rate was blamed on people giving up the search for
work.[]
The nearly 4 percent decline this week has called into
question gold's lengthy bull run as traders look forward to a
U.S. economic recovery that Federal Reserve Chairman Ben
Bernanke said "may be taking hold" even if growth remains too
weak to put a real dent in the nation's jobless rate, although
continued jitters over the euro zone have limited the decline.
"Money is moving out of bonds and gold into the broader
equity market as investors are willing to take on more risks
thinking that economic conditions have improved," said Brian
Hicks, co-manager of Global Resources Fund <PSPFX.O> of the
$2.9 billion fund manager U.S. Global Investors.
Friday's payrolls data, however, showed there are still
economic challenges on the horizon, he added. Hicks said that
he expects gold to rangebound near term until the market finds
a new catalyst such as next Friday's U.S. consumer prices
data.
Spot gold <XAU=> fell 0.1 percent to $1,369.85 on ounce at
3:25 p.m. EST (2025 GMT), having earlier touched a low of
$1,352.30 an ounce, its weakest since Nov. 26.
U.S. gold futures for February delivery <GCG1> settled down
$2.80 an ounce to $1,368.90.
Silver <XAG=> dropped 1.1 percent to $28.71 an ounce.
COMEX futures volume remained noticeably higher than recent
weeks as traders returned in the new year after the holiday
period. Gold futures volume was 45 percent above its 30-day
average, and silver was about 25 percent higher, preliminary
Reuters data showed.
Gold's upward trend has weakened after prices breached
below the 50-day moving average for the first time since
August, but a rebound is possible if it can hold above key
technical support near $1,360 an ounce. []
On the charts, gold has breached below two important
support levels, namely its 50-day average at $1,382 an ounce
and its December lows at the $1,360s, said Adam Sarhan, chief
executive of New York-based Sarhan Capital. (Graphic:
http://link.reuters.com/kat35r)
"At this stage of the game, gold is at a very important
inflection point. As long as gold holds above the $1,360s, we
should be able to see a bounce," Sarhan said.
JOBS DATA SHADES UPBEAT DATA
Prices bounced after Friday's jobs data dimmed some of this
week's optimism fueled by a series of better-than-expected U.S.
data including purchasing managers' index, new factory orders
and upbeat private-sector jobs data.
However, bullion was weighed by a rise in the U.S. dollar
to its highest in nearly four months against the euro on
worries about use of euro zone peripheral country bonds as
collateral. []
Gold fell in tandem with other commodities this week as
some investors unwound solid gains made on thin volume in gold
and other precious metals over the holidays. Gold rose nearly 3
percent in December, and was up 29.6 percent last year.
But many dealers remain loath to give up on the
unprecedented 10-year rise in gold prices, saying they'll wait
for far more evidence of a sustained recovery and stability in
Europe.
Strong physical demand could also lift prices after recent
decline. The head of the Bombay Bullion Association told
Reuters that gold imports to India, the world's largest
consumer, are likely to jump 64 percent to 500-550 tonnes in
2011. []
Gold-backed exchange-traded funds continued to see
outflows, with holdings of the largest, New York's SPDR Gold
Trust <GLD>, falling to a seven-month low on Thursday.
[]
Platinum <XPT=> gained 0.2 percent at $1,731.74 an ounce,
while palladium <XPD=> slipped 1.2 percent at $749.47.
Prices at 3:33 p.m. EST (2033 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCG1> 1368.90 -2.80 -0.2% -3.7%
US silver <SIH1> 28.671 -0.455 0.0% -7.3%
US platinum <PLJ1> 1735.10 2.40 0.1% -2.4%
US palladium <PAH1> 755.95 -6.95 -0.9% -5.9%
Gold <XAU=> 1368.69 -2.46 -0.2% -3.6%
Silver <XAG=> 28.68 -0.36 -1.2% -7.1%
Platinum <XPT=> 1731.00 2.00 0.1% -2.1%
Palladium <XPD=> 748.47 -10.03 -1.3% -6.4%
Gold Fix <XAUFIX=> 1367.00 9.00 0.7% -3.1%
Silver Fix <XAGFIX=> 28.39 -69.00 -2.4% -7.3%
Platinum Fix <XPTFIX=> 1735.00 19.00 1.1% 0.2%
Palladium Fix <XPDFIX=> 754.00 13.00 1.8% -4.7%
(Additional reporting by Jan Harvey in London; Editing by
Marguerita Choy)
