(Adds new quotes, updates prices)
By Anna Ringstrom
LONDON, April 3 (Reuters) - Gold rose above $900 an ounce in
London on Thursday, with investors eyeing Friday's U.S. jobs
report which may determine the metal's short-term direction.
Spot gold <XAU=> traded at $905.20/906.10 an ounce at 1518
GMT, up from $898.00/898.70 late in New York on Wednesday, when
it rose 1 percent.
Earlier in the session it fell as low as $889.30.
"The non-farm payrolls data tomorrow and the Fed meeting
later this month are likely to give direction," said Suki
Cooper, metals analyst at Barclays Capital.
Cooper said the overall environment for gold was positive
but said she would not rule out a correction in the short term.
"Prices are still very high, even after a correction recently,"
she said.
Standard Bank said in a note that after a resistance level
at $904 it saw a secondary resistance at $912. "A break higher
might see gold test $920," it said.
Data anticipated for a steer on the likely outcome of
Friday's U.S. jobs report had little effect on gold prices.
The U.S. Institute for Supply Management said the country's
non-manufacturing sector shrank less than expected, while
another report showed jobless claims grew more than expected
last week.
"We're in a little bit of a holding pattern at the moment,"
said Tom Kendall, metals analyst at Mitsubishi Corp.
Friday's report, expected to show that the economy shed jobs
in March for a third straight month, will be watched for clues
about U.S. rate moves. Lower rates boost gold's appeal as an
alternative investment, and vice versa.
"That report can certainly move the markets substantially on
Friday," Kendall said.
The U.S. Federal Reserve has cut its benchmark interest rate
six times since September to 2.25 percent from 5.25.
Analysts at Dresdner Kleinwort said in a research note the
potential for further rate cuts was limited. "Gold as well as
other markets might have got a bit too optimistic," they said.
Gold has rebounded almost 4 percent since falling to a
two-month low of $872.90 on Tuesday, but it was still well below
a record high of $1,030.80 hit on March 17.
Gold's usual main driver, the dollar, strengthened broadly
on expectations U.S. rates may not need to be cut as much as
previously thought, but bullion did not track it.
Cooper said physical demand in India, the world's No. 1 gold
consumer, might also help support prices.
In other precious metals, platinum <XPT=> rose 2 percent on
supply concerns, however remaining below a record of $2,290 hit
on March 4.
Platinum rose to $1,980/1,990 an ounce from $1,942/1,952 on
worries South Africa's power crisis, which has disrupted mining,
may last many years unless electricity demand reduced.
[]
Silver <XAG=> rose to $17.29/17.34 an ounce from
$17.17/17.22 while palladium <XPD=> fell slightly to $435/440 an
ounce from $436/441.
(Editing by Elizabeth Piper)
