* Focus on U.S. nonfarm payrolls, euro zone debt problems
* SPDR Gold holdings ease a tad as market weakens []
By Chikako Mogi
TOKYO, Feb 4 (Reuters) - Gold prices steadied around $1,110
on Thursday amid caution ahead of Friday's U.S. jobs data that
could further boost the dollar, undermining bullion's appeal as a
currency hedge.
The greenback kept its firm tone on Thursday after climbing
broadly the day before on improving U.S. jobs and industry data,
while fears Portugal and Spain could join Greece as the next euro
zone countries to face a debt crisis lifted the dollar against
the euro. []
The European Union vowed to hold Greece to an austere plan to
tackle the most severe debt crisis in the single currency zone,
but investor remained wary of more such problems.
"The dollar should be firm for a little while as problems in
the euro zone spread from Greece to Portugal," making investors
wonder if more countries might be exposed to similar fiscal
issues, said Ronald Leung, director of Lee Cheong Gold Dealers in
Hong Kong.
"We saw a correction from the highs yesterday as people want
to wait for the nonfarm payrolls data. Liquidity is not enough,"
he said.
Spot gold <XAU=> inched down 0.1 percent to $1,107.70 an
ounce as of 0637 GMT, compared with New York's notional close of
$1,108.85. Spot gold rose to a peak of $1,124.45 on Wednesday,
its highest since Jan. 20.
U.S. gold futures for April delivery <GCJ0> eased 0.4 percent
to $1,108.00 an ounce, compared with $1,112 an ounce on the COMEX
division of NYMEX.
The European Central Bank will likely keep interest rates
unchanged at a policy meeting on Thursday, but the bank's future
policy stance will also be a focal point in the market, Leung
said.
Bargain hunters, particularly from China, are continuing to
emerge and support the market's downside when prices fall below
$1,100 per ounce, Leung added.
Reflecting retail demand for the precious metal in the
region, gold bars were sought in Tokyo at a premium to spot
London prices, instead of at a discount as they have been in the
past few months. <GOLD/ASIA1>
Market participants expected trading to remain lacklustre
ahead of the Chinese Lunar New Year holidays.
Private U.S. employers reported the smallest payroll decline
in nearly two years in January, while the vast U.S. services
sector grew slightly, according to data released on Wednesday.
Signs that the pace of job losses is slowing could ease
pressure on the government as it seeks to regain momentum ahead
of Friday's more comprehensive nonfarm payrolls report, expected
to show the economy added jobs last month. []
A Reuters poll of economists gave a median estimate of 5,000
jobs added to U.S. nonfarm payrolls in January after a reported
85,000 job losses in December. Forecasts for January ranged from
a loss of 97,000 jobs to growth of 100,000 jobs.
As the gold market weakened, holdings at the world's largest
gold-backed exchange-traded fund, SPDR Gold Trust <GLD>, eased
0.14 percent to 1,110.339 tonnes as of Feb. 3, down 1.583 tonnes
from the previous business day. Its holdings had been unchanged
for about two weeks. []
But investment in precious metals remained generally firm.
ETF Securities said the total assets of its four U.S.
precious metals exchange-traded products, namely physical gold,
silver, platinum and palladium, now exceeded $1 billion. The
company launched a silver ETF, its first U.S. product, in July.
Precious metals prices at 0647 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1105.25 -3.60 -0.32 0.87
Spot Silver 16.21 -0.13 -0.80 -3.68
Spot Platinum 1558.50 -14.00 -0.89 6.24
Spot Palladium 428.75 -5.75 -1.32 5.73
TOCOM Gold 3249.00 -7.00 -0.21 -0.31 48667
TOCOM Platinum 4552.00 -29.00 -0.63 3.90 13985
TOCOM Silver 48.20 -1.10 -2.23 -6.77 973
TOCOM Palladium 1257.00 -24.00 -1.87 7.90 342
Euro/Dollar 1.3863
Dollar/Yen 91.00
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Additional reporting by Risa Maeda; Editing by Joseph Radford)
