* Gold's extends last session's losses by more than 1 pct
* Dollar buoyed by upbeat U.S. jobs data
* Silver, platinum group metals tumble in gold's wake
(Updates prices)
By Amanda Cooper
LONDON, Jan 5 (Reuters) - Gold extended losses on Wednesday,
continuing its biggest three-day slide since mid-November, after
surprisingly strong U.S. jobs data buoyed the dollar and
encouraged investors to buy into riskier assets.
Spot gold <XAU=> was bid at $1,369.80 an ounce at 1539 GMT,
against $1,379.73 late in New York on Tuesday. Earlier it fell
more than 1 percent to session lows at $1,363.80, a day after
having posted its largest one-day loss since Nov. 12.
U.S. February gold futures <GCG1> fell $7.40 to $1,371.40.
The precious metal came under heavy pressure, along with
other commodities, as the dollar rose more than 1 percent
against the euro after ADP Employer Services data showed strong
growth in private sector jobs. []
Strength in the dollar curbs gold's appeal as an alternative
asset and makes dollar-priced commodities more expensive for
holders of other currencies.
But gold still looks likely to be firmly underpinned by
factors such as concerns over sovereign risk, threats to U.S.
economic stability and the prospect of rising inflation in the
fast-growing developing world, analysts said.
"I don't think this marks a turnaround from what has been
and continues to be bullish sentiment towards gold and hard
assets in general," said Credit Agricole analyst Robin Bhar.
"The ADP numbers and the recent raft of economic numbers are
good to see, but it's not a one-way bet that this market is in a
solid economic uptrend," he said. "There are still a lot of
banana skins along the way."
Commodities slipped almost across the board as the dollar
rose, with oil prices down from their highest in nearly two
years and copper dropping from record highs. [] ][
HOPEFUL FOR PAYROLLS
The ADP report for December comes two days ahead of the key
December non-farm payrolls report, which is forecast to show a
rise in jobs. [IDnN05263495:]
"The big risk for gold, from my perspective, (is that) some
of the major hedge funds, which are long in physical gold or
ETFs, start to take profits," said Peter Fertig, a consultant
for Quantitative Commodity Research.
Reflecting waning investor appetite for gold, holdings of
the world's largest gold exchange traded fund, the SPDR Gold
Trust <GLD>, fell to a seven-month low, reversing most of the
inflows that followed the euro zone debt crisis. []
Silver <XAG=> fell for a third consecutive session, under
pressure from the strength in the dollar and a decline in other
growth-linked assets such as base metals.
Silver, which can mimic gold's performance when investors
feel nervous about the broader financial markets, is also an
industrial commodity that can take its cue from higher-risk
assets such as stocks and base metals.
Adding to the pressure on silver was the third daily rise in
the gold/silver price ratio, which measures the number of ounces
of silver needed to buy one ounce of gold.
The ratio fell by a third to multi-year lows in 2010 as
silver outperformed gold with an 84 percent price rise. Spot
silver <XAG=> was last down by 2.7 percent at $28.96 an ounce.
Weaker equity markets also undermined the platinum group
metals, which through their exposure to the auto market tend to
react in tandem with other cyclical assets.
Spot platinum <XPT=> fell to a one-week low at $1,701.40
before recovering to $1,709.90, still down 2.5 percent on the
day, while palladium <XPD=> fell by 2.6 percent to $754.98.
(Editing by Jane Baird)
