* Gold treads water ahead of non-farm payrolls at 1230 GMT
* Central Bank Gold Agreement renewed for five-year term
* South African union, Eskom hope to avoid strike
(Updates throughout, changes dateline-pvs TOKYO)
By Jan Harvey
LONDON, Aug 7 (Reuters) - Gold held around $960 an ounce in
Europe on Friday, taking support from a slightly weaker dollar,
but trading was muted ahead of key U.S. non-farm payrolls data
due later in the session.
The numbers are seen as a key indicator of the strength of
any economic recovery, analysts said.
Spot gold <XAU=> was bid at $960.20 an ounce at 0914 GMT,
against $962.15 an ounce late in New York on Thursday. U.S. gold
futures for December delivery <GCZ9> on the COMEX division of
the New York Mercantile Exchange were flat at $962.90 an ounce.
"The general consensus is that non-farm payrolls are going
to be slightly lower than last month, which should support U.S.
equities and we should see more dollar weakness... which would
be positive for gold," said Standard Bank analyst Walter de Wet.
"But if it comes in higher than expected, we'll see more
treasuries buying, equities down (and) some dollar strength as
well," he added. "That would be gold negative."
A slight weakening of the dollar helped support prices near
$960 an ounce. The U.S. currency <.DXY> edged lower against a
basket of currencies on Friday as investors awaited the data to
gauge the sustainability of the recent risk rally. []
Caution also permeated other markets, with European shares
edging lower after a dip in Asian stocks overnight and crude
prices also weaker, denting interest in gold as a hedge against
oil-led inflation. [] [] []
Demand for gold to back exchange-traded funds remained
lacklustre, with holdings of the largest, New York's SPDR Gold
Trust <GLD>, unchanged for a sixth session. []
Gold trade in India, the world's largest bullion consumer
last year, remained muted as most banks, the primary sellers of
gold, were on strike for a second day. []
CBGA RENEWED
In supply news, the European Central Bank said a group of
central banks in Europe have renewed the Central Bank Gold
Agreement, a pact to limit gold sales for a five-year period.
[]
The sales ceiling for signatories of the pact has been
reduced to 400 tonnes a year from 500 tonnes previously, and a
planned sale of 403 tonnes of gold by the International Monerary
Fund will be accommodated within this limit, the ECB said.
"It is not a surprise at all that there is a new Central
Bank Gold Agreement ... if only to allow the accommodation of
the IMF sales," said Stephen Briggs, a commodity strategist with
RBS Global Banking & Markets.
Elsewhere South Africa's biggest union and state power firm
Eskom voiced hopes ahead of talks on Friday that a strike that
could paralyse the country will be averted. []
South Africa is the world's third biggest gold miner, the
number two palladium producer and by far the largest source of
platinum globally. Talk of a strike took platinum and palladium
prices to multi-month highs earlier in the week.
"There's been a lot of buying (of platinum group metals) on
this since Monday," said de Wet. "Our general view was that
strikes to the extent power will be disrupted are highly
unlikely."
Spot platinum <XPT=> was at $1,236.50 an ounce against
$1,260, while palladium <XPD=> was at $268 against $269.50.
Silver <XAG=> was at $14.59 an ounce against $14.54.
(Additional reporting by Catherine Bosley; Editing by Peter
Blackburn)
