* Gold slips further on weaker euro ahead of rate cut
* Oil extends declines on recession fears
* Investors also await Friday's U.S. payrolls data
* Platinum down on profit taking
(Updates prices)
SINGAPORE, Nov 6 (Reuters) - Gold extended a 2-percent drop
in New York on Thursday, erasing some of this week's gains as
the U.S. dollar rose against the euro ahead of an expected rate
cut and reduced bullion's appeal as an alternative investment.
Dealers also awaited the release of U.S. nonfarm payrolls
data on Friday, which could further stoke fears of a global
recession and drive investors into less volatile assets.
Gold <XAU=> was trading at $738.65 an ounce, down $1.95 an
ounce from New York's notional close on Wednesday, when it
dropped around $20 due to a firmer dollar and tumbling oil.
"The U.S. job data will be released this week and it's
going to show bad numbers. So, crude oil and all commodities
will be down sharply," said Kazuhito Saito of Interes Capital
Management.
"Sentiment is bearish," said Saito, adding that gold could
revisit recent lows.
Bullion has gained as much as 6.2 percent this week to hit
a session high of $768. It was still down from a two-month high
of $931 hit in October but significantly higher than a 13-month
low of $680.80 also struck last month.
Gold was struggling to revisit a lifetime high of $1,030.80
in March, partly blamed on a recent slump in the equities
markets that forced investors to sell bullion to cover margin
calls. Losses in other commodities have also put pressure on
gold.
The euro fell to $1.2905 <EUR=> after data showed the euro
zone service sector tumbling to a decade low, adding to the
view the European Central Bank will cut interest rates by 50
basis points from the current 3.75 percent level. []
Investors also anticipate the BoE will cut interest rates
-- now at 4.5 percent -- by at least half a percentage point.
Oil <CLc1> slipped towards $65 a barrel on recession fears.
[]
But attention would be centered on Friday's payroll data
after ADP Employer Services' data showed private employers made
their deepest job cuts in six years in October.
The Reuters-Jefferies CRB Index <.CRB>, a global
commodities benchmark that tracks 19 futures markets, lost more
than 3 percent on Wednesday after data showed U.S. private
sector employers cut the most number of jobs last month in six
years.
"Intermittent rallies are unlikely to result in large gains
as swift profit taking might emerge. I guess gold could revisit
last month's low around $680," said a regional dealer.
Other precious metals also tracked gold lower, with
platinum falling more than 4 percent after hitting a two-week
high in the previous season on bargain hunting and Anglo
Platinum <AMSJ.J>, the world's biggest producer of platinum,
shut its smelter.
Platinum <XPT=> was trading at $832.50 ounce, down $30.00
from New York's notional close on Wednesday, when it rallied to
a two-week high of $882 an ounce on bargain hunting.
Angloplat said on Wednesday it would lose up to 200,000
ounces of refined platinum after shutting down its Polokwane
smelter following an incident. []
New York gold futures <GCZ8> fell $2.6 an ounce to $739.8.
Precious metals prices at 0251 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 738.65 -1.95 -0.26 -11.29
Spot Silver 10.21 -0.13 -1.26 -30.87
Spot Platinum 832.50 -30.00 -3.48 -45.23
Spot Palladium 210.50 -5.00 -2.32 -42.80
TOCOM Gold 2333.00 -59.00 -2.47 -23.76
20927
TOCOM Platinum 2654.00 -19.00 -0.71 -50.29
8331
TOCOM Silver 324.50 4.40 +1.37 -40.02
427
TOCOM Palladium 688.00 15.00 +2.23 -49.07
441
Euro/Dollar 1.2862
Dollar/Yen 98.13
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by Clarence Fernandez)
