* U.S. May jobs report gives tepid reading of labor market
* SPDR gold ETF holdings rise 21.3 T to record high
* Rand Refinery shows 50 pct rise in coin output in a week
(Recasts, updates prices, comment, changes byline, dateline
previous LONDON)
By Carole Vaporean and Jan Harvey
NEW YORK/LONDON, June 4 (Reuters) - Gold rose on Friday,
rebounding from early losses after weaker-than-expected U.S.
employment data pushed the stock market and many commodities
sharply lower, raising the safe-havens bid for bullion.
"With the employment numbers coming short of expectations
and the majority of jobs being census workers rather than
private payrolls, I think it shows there's a chance the economy
is not recovering as fast as previously believed," said Tom
Pawlicki, precious metals analyst at MF Global in Chicago.
"If the odds of a double-dip recession increasing based on
this, I think that would be positive for gold," he added.
Spot gold <XAU=> rose to $1,217.45 an ounce by 3:10 a.m.
EDT (1910 GMT) against $1,206.05 an ounce late in New York on
Thursday. Earlier, it touched a session low of $1,196.65 an
ounce. U.S. gold futures for August delivery <GCQ0> rose $7.70
to settle at $1,217.70 an ounce.
A slew of news in Europe, from confusion over the health of
Hungary's finances to unsubstantiated talk of concern over
Societe Generale's <SOGN.PA> derivatives business, contributed
to fears that drove investors to seek safety in gold.
"Second," Pawlicki added," the influx of news that took
place in Europe overnight feeds the safe-haven play as well,"
citing the Hungary and Societe Generale stories, as well as
comments from French Prime Minister Francois Fillon, who said
he saw parity between the dollar and the euro as "good news."
"In those kinds of uncertainty, gold benefits," he added.
Worries that Europe's sovereign debt troubles could spread
flared again after a Hungarian official said the country was at
risk of a Greek-style credit crisis [].
Those comments along with talk from France drove the euro
<EUR=> to a four-year low against the dollar. []
Gold has benefited this year from nervousness in financial
markets about the euro zone. Fears that sovereign debt problems
could hurt the wider economy sent gold in mid-May to an
all-time high at $1,248.95 an ounce.
"The question is, 'What do you want to hold in an
environment like this?' And people are answering that question
today by (buying into) gold," said Michael Widmer, an analyst
at Bank of America-Merrill Lynch.
The U.S. Labor Department said on Friday payrolls rose
431,000, buoyed by recruitment for the decennial census as the
government hired 411,000 extra workers. []
That was the largest monthly increase since March 2000 and
marked a fifth straight month of gains, but missed expectations
of 513,000 jobs. Some analysts also pointed to the composition
of payrolls growth coming mostly from temporary census workers
instead of private employers, indicating the economy is growing
only slowly. []
The report knocked stocks, the euro and industrial
commodities, with equities extending losses by more than 2
percent. [] []
INVESTMENT STRONG
Gold investment has been firm, with coin sales strong in
Europe and the United States. Rand Refinery Ltd., the world's
largest gold refiner, said production of South Africa's
Krugerrand gold coins soared by 50 percent in a week as the
euro zone debt crisis drove up investor demand.
[]
The world's largest gold exchange-traded fund, SPDR Gold
Trust <GLD.P>, reported a 21.3-tonne inflow on Thursday that
took its holdings to a record 1,289.839 tonnes. []
London's ETF Securities also reported inflows of 41,423
ounces of metal into its gold-backed exchange-traded products
that day, worth around $50 million.
"ETF investors' continued willingness to load up on gold
exposure provides a degree of comfort that a price floor is
near," said UBS analyst Edel Tully in a note.
Industrial precious metals -- silver, platinum and
palladium -- slid with base metals after the jobs report.
Platinum <XPT=> slipped to $1,510.50 an ounce from
$1,542.50, palladium <XPD=> to $424.50 from $448.50, and silver
<XAG=> fell to $17.34 from $17.94 an ounce late on Thursday.
In the longer term, platinum group metals in particular are
expected to be well supported by a recovery in demand.
"Improving auto and industrial demand bodes well for both
metals," said Barclays Capital in a note on Friday. "Potential
supply disruptions in South Africa could push the platinum
market into a deeper deficit."
(Reporting by Carole Vaporean; Editing by David Gregorio)
