(Updates to afternoon with quotes, prices)
By Atul Prakash
LONDON, April 4 (Reuters) - Gold gained in choppy trade on
Friday as weaker-than-expected U.S. jobs data pushed the dollar
down and lifted gold's appeal as an alternative investment.
But analysts said the market could witness a further
sell-off after tumbling last week to a two-month low.
Gold <XAU=> rose as high as $909.70 an ounce after the data,
but fell to $908.00/908.90 at 1459 GMT, against $903.40/904.20
late in New York on Thursday, when it gained more than $5.
"Gold is following the foreign exchange market and we expect
the market volatility to continue. On the technical side, the
upside trend is broken and we may head to the downside now,"
said Michael Kempinski, senior metals trader at Commerzbank.
"We saw heavy long liquidation last week, but the general
position of the funds are still long here."
The dollar slipped after government data showed U.S.
employers cut payrolls for a third month in a row in March,
slashing 80,000 jobs for the biggest monthly job decline in five
years as the economy headed into a downturn.
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
Gold hit a two-month low of $872.90 an ounce on Tuesday on
fund selling before staging a modest rebound. It was still 12
percent lower than last month's lifetime high of $1,030.80 and
dealers said jewellers showed buying interest at the lows.
U.S. gold futures for June delivery <GCM8> rose $1.20 to
$910.80 an ounce.
"In the coming days, gold should trade in a wide range
between $850-$950 an ounce. Whether gold will test the upper end
of this range will depend on it going through and holding gains
above the $910-$920 level," said Wolfgang Wrzesniok-Rossbach,
head of sales at German precious metals trading group Heraeus.
PLATINUM SEEN SUPPORTED
Platinum <XPT=> rose to $1,990/2,000 from $1,985/1,995 an
ounce on Thursday, when it rose more than 2 percent on worries
that South Africa's state utility could not meet electricity
demand from precious metals miners.
"The ongoing power supply concerns impacting South African
production continue to underpin prices," Barclays Capita said in
a daily market report.
Implats, the world's second biggest platinum producer, said
South Africa did not boost its power allotment to 95 percent
from 90 percent. []
Government officials said on March 6 that mines would be
able to increase their power consumption to 95 percent of normal
use but the company said not all mines got the higher allotment.
South Africa's power crisis may last many years unless there
is a sustained drop in electricity demand in Africa's largest
economy, state power utility Eskom [] said this week.
Supply worries, caused by mining disruption in main producer
South Africa, sparked speculative buying and propelled the price
to record high of $2,290 an ounce on March 4.
Spot silver <XAG=> was at $17.68/17.73 an ounce, compared
with $17.36/17.41 in New York, while palladium <XPD=> was flat
at $436/441 an ounce.
(Reporting by Atul Prakash; editing by Elizabeth Piper)
