* Dollar slips versus euro as buyers seek other investments
* Platinum up 5 percent as weak dollar spurs bargain hunting
* Traders eye non-farm payrolls data due later this session
(Recasts, adds comment, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Nov 7 (Reuters) - Gold firmed in Europe on Friday as
the dollar weakened against the euro, boosting the precious
metal's appeal as a currency hedge, while platinum surged 5
percent as investors sought bargains after recent price falls.
Traders are eyeing U.S. non-farms payrolls data due out
later in the session for clues as to the next direction of trade
in precious metals.
Spot gold <XAU=> was quoted at $741.05/743.05 at 1038 GMT
against $731.55 in late New York trade on Thursday.
Platinum <XPT=> was at $856/876 an ounce against $823,
having earlier touched a high of $865.50. Its sister metal
palladium tracked it higher to a peak of $230 an ounce, before
easing to $224/234 against $214.50.
A supply outage in major producer South Africa, where Anglo
Platinum <AMSJ.J> said a smelter shutdown would cut output by up
to 200,000 ounces.
A weaker dollar also helped platinum to rise, analysts said.
"People are looking at the charts and realising both
platinum and palladium have broken out of the downtrend in the
charts, and that is bringing in more funds on the long side,"
says Mitsubishi precious metals strategist Tom Kendall.
"There is a reasonable chance that we have seen the lows in
platinum, and probably in palladium also," he added.
Interest in platinum has been renewed after the metal fell
more than 50 percent from July onwards, with investors seeking
to buy into the metal at lower prices, traders said.
Both platinum and palladium have been pressured sharply
lower by fears demand for the metals from automakers, who
account for around half of annual consumption, will decline in
the face of the economic slowdown.
Beijing Automotive Industry Holding, Chrysler LLC's <CBS.UL>
partner in China, became the latest carmaker to cut its sales
forecasts for this year on Friday, to above 800,000 units from 1
million. []
Meanwhile gold is also being helped by the weaker dollar and
by fresh fears over the outlook for the global economy, which is
boosting the precious metal's appeal as a haven.
A series of interest rate cuts in Europe on Thursday
provided a temporary fillip to stock markets, but the gains were
not sustained.
"While this adds to the enormous monetary stimulus already
in motion globally, markets remain unconvinced that it is enough
to save the world from a major economic downturn," noted
Standard Bank analyst Walter de Wet.
Nontheless, a low interest rate environment should boost the
appeal of gold, as it will cut the opportunity cost of investing
in non-interest bearing assets such as the precious metals.
Traders are now turning their attention to the release of
non-farms payrolls data at 1330 GMT, which is likely to have a
significant impact on the currency markets.
The employment data is likely to show that job cuts hit a
five-year high of 200,000 in October and that unemployment
jumped to 6.3 percent from 6.1 percent a month before, according
to a Reuters poll.
The dollar weakened against the euro ahead of the data as
investors sold the U.S. currency in favour of higher-yielding
assets, lending support to the precious metals. []
Oil prices also rose, climbing more than $1 a barrel as the
weaker dollar offset fears over the demand outlook. Rising crude
prices are typically positive for gold, which is often bought as
a hedge against oil-led inflation. []
Among other precious metals, spot silver <XAG=> rose to
$10.14/10.24 from $9.96 an ounce late in New York on Thursday.
"Silver production growth may slow as producers halt
expansion," said Fairfax analyst John Meyer in a note.
(Reporting by Jan Harvey; editing by Editing by Peter
Blackburn)
