* Gold takes a breather after hitting record at $1,226.10/oz
* Traders eye U.S. non-farm payrolls data at 1330 GMT
* Main New York gold, silver ETF holdings rise
* ETF Securities platinum, palladium ETPs hit record
(Releads, adds comment, updates prices)
By Jan Harvey
LONDON, Dec 4 (Reuters) - Gold eased back towards $1,200 an
ounce in Europe on Friday as a slight recovery in the dollar
prompted traders to cash in gains after the previous day's
run-up to record highs.
The market is taking a breather ahead of key U.S. payrolls
data later in the day. If the data beats or misses expectations,
it could have a significant impact on the dollar, and
consequently on gold.
Spot gold <XAU=> was bid at $1,204.95 an ounce at 1153 GMT,
against $1,207.10 late in New York on Thursday. U.S. gold
futures for February delivery <GCG0> on the COMEX division of
the New York Mercantile Exchange fell $12.10 to $1,205.30.
Spot prices struck a record high at $1,226.10 an ounce on
Thursday amid expectations for persistent weakness in the dollar
and rising inflation in 2010.
"As soon as we score a record, we then seem to correct...
but we can correct lower and still remain within the uptrend by
a wide margin," said Calyon analyst Robin Bhar. "If we can end
above $1,200 today it will look good on the weekly chart."
He said the number of options at elevated levels in the gold
futures market suggest hopes for higher prices are intact.
"A trader said there has been some good upside buying in
March and April in the $1,300s and even $1,400s, so there are
some good bullish expectations out there," Bhar said.
"Underlying prices gravitate towards the strike levels with
the highest open interest, so... if open interest continues to
build that is sure to bully the market towards that level."
In the shorter term, the market will be closely eyeing U.S.
non-farm payrolls numbers due at 1330 GMT for their impact on
the dollar, a major driver of the gold market.
Economists polled by Reuters forecast the U.S. economy lost
130,000 jobs in November, compared to 190,000 in October.
"Poor unemployment figures could lead to gold weakness in
the short term, but should lead to further safe haven demand on
concerns about a double dip recession," said bullion dealer
GoldCore in a note.
INVESTMENT FIRM
The dollar edged up 0.11 percent against a basket of
currencies on Friday as investors awaited the U.S. government's
monthly employment report for clues to the pace of recovery in
the world's largest economy. []
Other commodities edged lower, with oil prices declining for
a third day on Friday and industrial metals also falling. Gold
tends to track crude prices, as the metal can be bought as a
hedge against oil-led inflation. [] []
Investment demand for gold remained firm, with the world's
largest gold-backed exchange-traded fund, the SPDR Gold Trust
<GLD>, saying its holdings rose 0.276 tonnes to 1,131.490 tonnes
on Thursday. []
Elsewhere, metals consultancy GFMS said China will overtake
India as the world's largest gold consumer in 2009, with total
demand forecast at 432 tonnes. Indian demand has been pressured
this year by rising prices. []
Among other precious metals, silver <XAG=> was bid at $18.80
an ounce against $18.80. The world's largest silver ETF, the
iShares Silver Trust <SLV>, said its holdings rose 113.05 tonnes
to a record 9,514.35 tonnes on Thursday. []
Platinum <XPT=> was at $1,480 an ounce against $1,480.50,
while palladium <XPD=> was at $378 against $380.50.
ETF Securities, which operates exchange-traded products that
issue securities backed by physical metal, said holdings of its
platinum and palladium ETPs rose to record levels on Thursday,
up 0.3 percent and 0.7 percent respectively.
(Editing by James Jukwey)
((jan.harvey@thomsonreuters.com; +44 207 542 7744; Reuters
Messaging: jan.harvey.reuters.com@reuters.net))
