PRECIOUS-Gold rises to $940/oz ahead of U.S. jobs data

                                
 * Jobs data expected to show highest unemployment in 25
years
                                
 * Firmly underpinned at $900 on buying in Asia
                                
 By Risa Maeda
                                
 TOKYO, March 6 (Reuters) - Gold rose to $940 per ounce on
Friday as traders expected more grim economic news from a key
U.S. jobs report later in the day, which could prompt
safe-haven buying of the metal.
                                
 U.S. non-farm payrolls are forecast to have shed 648,000
jobs in February, which would be the biggest monthly decline
since 1949, and the jobless rate is seen rising to its highest
in 25 years. [nN04539340]
                                
 Stock markets are already falling, with Tokyo's key Nikkei
share average <.N225> down 3.5 percent on Friday after U.S.
stocks fell to 12-year lows on Thursday following a warning by
General Motors <GM.N> of possible bankruptcy and on doubts
about the health of the U.S. banking system. [.T]
                                
 Spot gold <XAU=> stood at $938.30 an ounce at 0700 GMT, up
0.7 percent from its notional close on Thursday, when it rose 2
percent. It earlier touched a high of $940.
                                
 "It (gold) won't be hurt unless data comes in far better
than expected and indicates positive developments," said a
precious metals trader in a trading company in Japan.
                                
 Earlier this week, gold fell to a three-week low of
$900.95, as some investors who thought a string of bad news was
petering out shifted funds away from the yellow metal to other
commodities and battered company shares.
                                
 It has been well underpinned above $900 by buying from
risk-averse investors, including those in India, traders said.
                                
 "Overall, uncertainty is still hanging over us," said Naomi
Suzuki, a senior analyst at SC Asset Management Co.
                                
 "Gold has tested the $900 level a few times, but so far in
vain. That proved bearish views over the global economy are
still outweighing optimism."
                                
 Gold also retained its allure as a hedge against inflation.
Central banks and governments of affected economies are
unlikely to stop supplying money unless there are clear signs
of recovery.
                                
 Gold was supported after the European Central Bank cut
interest rates by 50 basis points, as expected. The Bank of
England cut rates by 50 basis points to a historic low of 0.5
percent, and said it would buy assets worth 75 billion pounds
to help the British economy.
                                
 Japan seems to be catching up. The Nikkei business daily
reported the government is considering tripling to 3 trillion
yen ($30.6 billion) a programme of low-interest loans and cash
injections it is offering to firms in need of help.
[ID:nT95926]
                                
 But investors were not fully ready to buy up gold as
inflows to gold-backed exchange traded funds (ETFs) have
stalled in the past week.
                                
 The world's largest gold-backed ETF, the SPDR Gold Trust
<GLD>, said holdings stood at a record 1,029.29 tonnes as of
March 5, unchanged from Feb. 26, when they first hit that
level.
                                
 Precious metals prices at 0658 GMT
 Metal             Last    Change  Pct chg  YTD pct chg
Turnover
 Spot Gold         939.20    7.20   +0.77     47.74
 Spot Silver        13.33    0.11   +0.83      3.74
 Spot Platinum    1071.50   13.00   +1.23     -5.34
 Spot Palladium    200.00    4.00   +2.04    -39.76
 TOCOM Gold       2952.00   28.00   +0.96     20.74      
50904
 TOCOM Platinum   3351.00   10.00   +0.30    -21.23       
7391
 TOCOM Silver      413.90    4.10   +1.00    -16.10        
448
 TOCOM Palladium   632.00   -7.00   -1.10    -49.64        
266
 Euro/Dollar       1.2700
 Dollar/Yen         97.28
 TOCOM prices in yen per gram, except TOCOM silver which is
 priced in yen per 10 grams. Spot prices in $ per ounce.
 (Additional reporting by Miho Yoshikawa; Editing by Michael
Urquhart)