* Non-farm payrolls numbers come in weaker than expected
* Dollar slips sharply versus the euro after jobs data
* Over 400,000 lots traded in platinum, palladium ETPs
(Recasts, updates comments, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Jan 8 (Reuters) - Gold turned higher in
choppy trade on Friday, snapping a five-week losing streak as
the dollar fell sharply after a report showed U.S. employers
cut more jobs than expected in December.
The disappointing employment report dampened hopes an
economic recovery may be on the way, slashing expectations that
a U.S. interest hike may be imminent -- a bullish signal for
gold and equities. []
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.
Meanwhile, the first U.S. platinum and palladium-backed
exchange-traded product (ETP), which give investors easier
access to the industrial metals used in autocatalysts, have
generated significant trading volume on its first trading day.
Spot gold <XAU=> hit a high of $1,139.30 an ounce in the
wake of the data and was last at $1,136.20 an ounce at 3:18
p.m. EST (2018 GMT), against $1,131.40 late in New York on
Thursday. Earlier, it slipped as low as $1,119.45.
U.S. February gold futures <GCG0> settled up $5.20 at
$1,138.90 an ounce on the COMEX division of the NYMEX.
"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.
The dollar plunged against the euro in volatile trade after
the weak job report.[]
PGMS HEAVILY TRADED
Investment demand for gold-backed exchange-traded funds
remained soft after a lackluster 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 higher to $18.44 an ounce
against $18.22 late in New York on Thursday. Platinum <XPT=>
hit a 16-month high of $1,576.50 and was later at $1,574 an
ounce versus $1,554.50, while palladium <XPD=> was at $425.50
an ounce against $424.
The first platinum and palladium-backed ETPs started in a
positive note, with more than 400,000 contracts traded on a
combined basis on the NYSE Arca platform. []
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. []
(Reporting by Frank Tang and Jan Harvey; Editing by Marguerita
Choy)
