* Activity thin ahead of U.S. payrolls data
* SPDR Gold holdings <XAUEXT-NYS-TT> steady
By Miho Yoshikawa
TOKYO, Oct 2 (Reuters) - Gold inched back above $1,000 on
Friday ahead of the release of key U.S. employment data
expected to provide direction for currency markets, currently
the main driver for precious metals.
If non-farm payrolls comes in weaker than the expected
180,000 job losses, it could renew fears about recovery in the
world's largest economy and bolster the dollar, seen as a safe
haven. []
Gold is often viewed as an alternative to holding the
dollar, and benefits from a weakness in the U.S. unit, which
makes it more affordable for those buying in other currencies.
Gold <XAU=> was at $1,000.05 an ounce at 0253 GMT, up 0.2
percent from the notional close in New York of $998.50.
U.S. gold futures for December delivery <GCZ9> were at
$1,001.5 an ounce, up 0.08 percent.
After gold's 8.7 percent rise in the three months to
September, its strongest performance since the first quarter of
2008, it was not clear whether the precious metal can sustain a
challenge of the record high of $1,030.80 per ounce from March
2008.
"After the sell-off last week it's struggling to gain
traction above $1,000, and as we've seen it get back and then
dip twice now," said Darren Heathcote, head of trading at
Investec Australia in Sydney.
He said, however, that there was fundamentally sufficient
support on the downside from rising oil prices, which fans
fears of inflation, and the sluggish state of the U.S. economy.
"Ultimately support is probably going to come around $985
on the bottom," Heathcote said.
Others said there was insufficient support for gold from
the physical side.
"Supply and demand fundamentals are capping the gold price.
Scrap is becoming more available and jewellery demand goes down
every time the price goes up," said Tony Parry, a gold analyst
at Sydney-based Resource Capital Research.
He added: "The first quarter crisis-driven demand for
gold-backed ETFs almost evaporated in the second quarter with
an 88 percent fall in funds flow into ETFs."
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,095.327
tonnes on Oct. 1, unchanged from the previous business day.
[]
"We expect trading in the $950-$1,000 band over the next
six months, with more risk of a sustained break below $950 than
above $1,000," Parry said.
The U.S. dollar retained broad gains on Friday as investors
cut short positions and booked profits in higher-yielding
currencies ahead of the U.S. payrolls report. []
PRICES
Precious metals prices at 0246 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1000.10 1.60 +0.16 13.63
Spot Silver 16.30 -0.02 -0.12 43.99
Spot Platinum 1279.00 1.50 +0.12 37.23
Spot Palladium 288.50 1.00 +0.35 56.37
TOCOM Gold 2887.00 -32.00 -1.10 12.20
22215
TOCOM Platinum 3689.00 -42.00 -1.13 39.10
5956
TOCOM Silver 468.50 -10.50 -2.19 46.73
290
TOCOM Palladium 836.00 -14.00 -1.65 52.00
194
Euro/Dollar 1.4537
Dollar/Yen 89.42 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 James Regan in Sydney; Editing by
Michael Urquhart)
