* Gold pressured by expectations monetary policy may tighten
* Coming up: U.S. non-farm payrolls data, 1230 GMT
* SPDR gold ETF sees biggest ever quarterly outflow in Q1
* U.S. Mint reports highest ever quarterly silver coin sales
(Updates prices)
By Jan Harvey
LONDON, April 1 (Reuters) - Gold prices eased a touch in
Europe on Friday ahead of hotly anticipated U.S. payrolls data
for March, amid expectations that a strong number could increase
the likelihood of tighter U.S. monetary policy.
Spot gold <XAU=> was bid at $1,433.94 an ounce at 1107 GMT,
against $1,436.48 late in New York on Thursday. U.S. gold
futures for April delivery <GCJ1> fell $4.30 to $1,434.60.
Strong payrolls may reassure markets of the strength of the
U.S. economic recovery, making it more likely that authorities
will rein in their recent loose monetary policy -- a possible
preliminary step to higher interest rates.
"Whilst one can come up with various scenarios, the
overwhelming one will be that the world is recovering, and we
will probably see that from the payroll numbers this afternoon,"
said Nick Moore, head of commodity strategy at RBS.
He said a positive payrolls report could be negative for
gold, which has already come under pressure this month from
expectations that the European Central Bank will hike interest
rates this month.
"All we have seen is the positive side of the gold story,
and what we have to see now is how gold fares in an environment
of rising interest rates, where holding a non-yielding asset
goes against you," he said.
The dollar rose against a basket of currencies and firmed
against the euro ahead of the numbers, which are expected to
show the U.S. economy added 190,000 jobs in March, its second
straight month of job growth. []
The dollar was also helped by a report in the Wall Street
Journal that Minneapolis Federal Reserve President Narayana
Kocherlakota signalled the Fed could raise interest rates by 75
basis points by the end of the year. []
Concerns over the financial health of smaller euro zone
economies such as Portugal and Irelands are continuing to weigh
on the euro, meanwhile.
FOCUS SHIFTS TO UNITED STATES
"While the focus of attention is still largely on the euro
zone on renewed sovereign debt fears, the U.S. will start
gradually coming back into the picture through (the second
quarter)," said VTB Capital analyst Andrey Kryuchenkov.
"We will most likely see mounting pressure on the Fed to
start curbing liquidity (not necessarily by hiking rates) should
macro data continue improving, while any hawkish comments from
central bankers will limit the upside in gold going forward."
Among other commodities, oil prices rose, with U.S. crude
edging above $107 a barrel and Brent crude rising towards $118
as investors anticipated a positive U.S. payrolls report, and as
unrest continued across the Middle East and North Africa. []
In Libya, rebels sought to retake the oil town of Brega and
regain momentum against better equipped forces loyal to Muammar
Gaddafi. More unrest was reported in Bahrain. []
Investment products such as gold-backed exchange-traded
funds saw less interest, with the largest, New York's SPDR Gold
Trust <GLD>, reporting its biggest ever quarterly outflow in the
first three months of 2011. []
But elsewhere the U.S. Mint said it sold more gold American
Eagles in the three months to end March than in any quarter
since the end of 2009, and reported its highest ever quarterly
sales of silver American Eagle coins. []
Silver <XAG=> was bid at $37.62 an ounce against $37.60.
Meanwhile platinum <XPT=> was at $1,773.24 an ounce against
$1,766.30, while palladium <XPD=> was at $770 versus $758.35.
(Reporting by Jan Harvey; editing by Keiron Henderson)
