* Non-farm payrolls numbers come in weaker than expected
* Dollar slips sharply versus the euro after data
* Traders await launch of platinum, palladium ETPs
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, Jan 8 (Reuters) - Gold steadied on Friday, giving up
gains that earlier took it to near $1,140 an ounce, as the
dollar recovered the losses it made after December's U.S.
non-farm payrolls data missed expectations
The weaker-than-expected reading dampened expectations a
U.S. interest hike may be imminent and pressured the dollar
versus the euro.
Spot gold <XAU=> hit a high of $1,139.30 an ounce in the
wake of the data and was bid at $1,127.20 an ounce at 1535 GMT,
against $1,131.40 late in New York on Thursday. Earlier it
slipped as low as $1,119.45.
"People were largely going short into the market, and as the
non-farm payrolls for December were slightly worse than
expected, those shorts were covered," said Michael Widmer, an
analyst at Bank of America Merrill Lynch.
"The dollar came off quite a lot on the back of it, and that
contributed to pushing gold higher," he added.
U.S. gold futures for February delivery <GCG0> on the COMEX
division of the New York Mercantile Exchange fell $5.70 to
$1,128.00 an ounce.
The dollar plunged against the euro after data showed U.S.
job losses were 85,000 last month, while markets were expecting
no cuts. It later recovered lost ground, however. []
The numbers dampened burgeoning hopes an economic recovery
may be on the way, which might have led to a hike in U.S.
interest rates sooner rather than later.
Gold prices have benefited from low interest rates in the
last year, which contributed to dollar weakness and cut the
opportunity cost of holding non-interest bearing assets.
"The play for gold (this year) is speculating on the move in
U.S. interest rates," said Jeremy East, Standard Chartered's
global head of commodity derivatives trading. "(The payrolls
data) will obviously have an impact on expectations for that."
On the wider markets, oil prices eased after the data, while
U.S. stock opened lower on Wall Street. [] []
INVESTMENT SOFT
Investment demand for gold-backed exchange-traded funds
remained soft after a lacklustre start to the new year. The
largest gold ETF, New York's SPDR Gold Trust <GLD>, reported a
further 0.4 tonne dip in its holdings on Thursday. []
Its holdings have fallen 10 tonnes in 2010 so far, while
those of London-based ETF Securities' gold-backed exchange
traded products are down 19,000 ounces in the same period.
Spot silver <XAG=> tracked gold lower to $18.34 an ounce
against $18.22. Platinum <XPT=> hit a 16-month high of $1,575
and was later at $1,557.50 an ounce versus $1,554.50, while
palladium <XPD=> was at $422.50 an ounce against $424.
The United States' first platinum and palladium-backed ETPs
are due to start trading in New York later on Friday, which will
allow U.S. investors to invest in the metals used in
autocatalysts via an ETP. []
"Both (platinum and palladium) could gain serious traction
should ETF investment demand prove strong," James Moore, an
analyst at TheBullionDesk.com, said in a note.
Investment appetite for the metals is expected to be firm
this year as a turnaround in the global economy lifts car
demand. Over half the world's platinum and palladium is consumed
by carmakers.
China sold more than 13.5 million vehicles in 2009, the
official Xinhua news agency said on Friday, overtaking the
United States to become the world's largest auto market as
government policy initiatives spurred demand. []
(Editing by James Jukwey)
