* Gold holds onto gains late, gearing up for weak payrolls
* Largest gold, silver ETFs post fresh inflows on Wed
* Coming up: US August nonfarm payrolls; 1230 GMT Fri
(Recasts, updates prices, market activity; adds second bylind,
dateline, previously LONDON)
By Carole Vaporean and Amanda Cooper
NEW YORK/LONDON, Sept 2 (Reuters) - Gold rose on Thursday,
settling slightly higher as investors set positions ahead of
the key U.S. employment report, forecast to show a worsening
labor market, which could boost demand for safe-haven assets.
Concern about growth-linked assets ahead of the August jobs
data sharpened investor appetite for bullion, as
exchange-traded funds boosted their holdings.
But a slew of improved, though tepid, U.S. economic
readings kept a lid on gold's rise on Thursday.
"People are reluctant to do much of anything today except
position for tomorrow," said John Canally, investment
strategist and economist at LPL Financial in Boston.
Gold bullion <XAU=> moved up to $1,251.25 by 2:32 p.m. EDT
(1832 GMT) from $1,243.50 an ounce in late New York business on
Wednesday. U.S. December gold futures <GCZ0> rose $5.30, or
0.42 percent, to close at $1,253.40 an ounce.
December gold finished short of Wednesday's $1,256.60 peak,
which was the highest since June 28.
Spot prices this week reached a two-month high at $1,254.65
after a raft of U.S. data suggested the world's largest economy
could be slowing enough to warrant further quantitative easing
from the Federal Reserve.
A weak U.S. labor market report on Friday could trigger a
new round of safe-haven gold buying.
According to a Reuters poll, economists, on average, expect
a decline of 100,000 in payrolls growth for August, as well as
a nudge up to 9.6 percent in the unemployment rate.
Among the reports that some market participants said
limited gold's gains on Thursday were better-than-expected U.S.
homes sales data for July. U.S. jobless claims, factory orders
and same-store sales data also showed some improvement.
Pending sales of previously owned U.S. homes rose
unexpectedly by 5.2 percent in July, suggesting a tax
credit-related housing market decline was close to bottoming.
Economists polled by Reuters had forecast the index would
fall 1.0 percent in July. Compared to July last year, pending
home sales fell 19.1 percent. [] []
While encouraging data may limit gold's gains, analysts
said economic worries will keep supporting a safe-haven bid.
"We know we are weak and we are not coming out of this in a
'V' shaped recovery. At best, we will have an 'L'. Now the next
question has to be, does it get worse than the 'L' and turn
lower?," said Howard Simons, strategist at Bianco Research.
ETFS SWELL
The world's largest gold-backed ETF, New York's SPDR Gold
Trust <GLD.P>, said its holdings rose to 1,304.028 tonnes on
Sept. 1 from 1,302.508 tonnes the day before, having climbed in
August after retreating in July. []
Investors tend to favour physically backed bullion products
as a haven from risk in times of economic or financial market
uncertainty, analysts said.
"Monthly ETF inflows turned positive in August; these need
to accelerate for gold to overcome potential scrap supply at
these prices and rise sustainably through $1,250," Swiss bank
UBS noted in a daily report.
Silver <XAG=> rose by about 1.5 percent to $19.64 an ounce
against $19.32. The ratio of gold to silver -- or how many
ounces of silver are needed to buy an ounce of gold -- fell to
its lowest in 3-1/2 months at 64.29.
Holdings of the largest silver-backed ETF, the iShares
Silver Trust <SLV>, rose 53.27 tonnes on Wednesday, their
largest one-day rise since May 13. []
Platinum was up at $1,551.50 an ounce from $1,528, while
palladium <XPD=> climbed to $525.25 an ounce from $516.
PGM metals were supported by strong Chinese car sales
numbers, which showed a 59 percent sales rise in August from a
year earlier. This helped offset data showing the weakest U.S.
August car sales in 27 years. [] []
Carmakers are the largest consumers of platinum group
metals, which are widely used in catalytic converters.
Prices at 2:40 p.m. EDT (1840 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1253.40 5.30 0.4% 14.3%
US silver <SIZ0> 19.638 0.279 0.0% 16.6%
US platinum <PLV0> 1551.50 15.80 1.0% 5.5%
US palladium <PAZ0> 523.45 5.10 1.0% 28.0%
Gold <XAU=> 1250.65 7.15 0.6% 14.1%
Silver <XAG=> 19.64 0.32 1.7% 16.6%
Platinum <XPT=> 1546.50 18.50 1.2% 5.5%
Palladium <XPD=> 521.50 5.50 1.1% 28.6%
Gold Fix <XAUFIX=> 1248.50 0.75 0.1% 13.1%
Silver Fix <XAGFIX=> 19.45 -2.00 -0.1% 14.5%
Platinum Fix <XPTFIX=> 1550.00 12.00 0.8% 5.7%
Palladium Fix <XPDFIX=> 521.00 2.00 0.4% 29.6%
(Additional reporting by Jan Harvey; editing by Keiron
Henderson and Alison Birrane; Editing by David Gregorio)
