* Dollar pares gains vs the euro after U.S. payrolls numbers
* Gold eyes support around $1,050, then $1,030/1,020/oz
* Palladium off lows after tumbling 6.3 percent
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, Feb 5 (Reuters) - Gold cut losses on Friday,
recovering from earlier three-month lows, as the dollar pared
gains against the euro after U.S. payrolls data, lifting
appetite for the precious metal as an alternative asset.
A government report showed U.S. employers unexpectedly cut
20,000 jobs in January, though the unemployment rate fell to a
five-month low of 9.7 percent. []
Spot gold <XAU=> was bid at $1,060.20 an ounce at 1429 GMT,
against $1,062.60 late in New York on Thursday. U.S. gold
futures for April delivery <GCJ0> on the COMEX division of the
New York Mercantile Exchange fell $3.00 to $1,060.00 an ounce.
"We had odd numbers today -- a drop in jobs, but the
unemployment rate has also dropped -- which has helped markets
to stabilise," said Thomas Hartmann, a broker/analyst at
California-based Altavest Worldwide Trading.
Earlier the metal dropped to its lowest in three months,
extending Thursday's slide, as a fall in the euro amid fears
over the fiscal health of peripheral euro zone economies
pressured prices.
"We could see some recovery in gold, maybe back to $1,080 an
ounce, but certainly some damage was done yesterday," said
Hartmann. "If you are bullish on gold, it is important that the
market holds the $1,050 an ounce level."
The dollar trimmed losses against the euro in the wake of
the data, helping gold to rise. Other markets also recovered,
with European shares rising from earlier three-month lows, while
U.S. stock futures pared their earlier decline. [] []
Oil prices steadied above $73 a barrel, consolidating after
its biggest one-day fall since July on Thursday, while base
metals also lifted from lows. [] []
But risk appetite remains fragile, with growing sovereign
debt problems in the euro zone, highlighted by European Central
Bank chief Jean-Claude Trichet in a press conference on
Thursday, fuelling jitters about the global economic recovery.
ETF REPORTS OUTFLOWS
Gold is vulnerable to extending recent sharp losses to reach
$1,020-1,030 an ounce if support at current levels fails to
hold, and may face a deeper retracement below $1,000 if it
breaks that level, technical analysts said. []
"That whole area is now becoming more and more important as
the next barometer of gold sentiment on a trading basis," said
Redtower Research analyst Gerry Celaya.
"If we go below $1,030-1,020, anybody who is hoping this is
a pullback within a broad channel would start to (rethink). They
would start to look to a retreat back into the low end of the
trading range, around $980."
Investment in gold-backed exchange-traded funds was
lacklustre, with holdings of the world's biggest, New York's
SPDR Gold Trust <GLD> falling 5.8 tonnes or 0.5 percent on
Thursday. []
However, premiums for gold bars in Asia were steady above $1
on Friday as jewellers made last-minute purchases ahead of the
Lunar New Year, with bargain hunting from other Asian consumers
also emerging as bullion held near three-month lows. []
Silver <XAG=> was at $15.15 an ounce versus $15.23 and
platinum <XPT=> was at $1,473.50 an ounce versus $1,499.50.
Palladium <XPD=>, a smaller and less liquid market than
other precious metals, hit a 2010 low of $379.50 an ounce and
was later at $394 against $406.50.
Holdings of new platinum and palladium-backed ETFs launched
in New York last month have stabilised after rising sharply in
the first days of their existence, prompting price gains.
Holdings of ETFS Physical Platinum Shares <PPLT.P> were
unchanged for a third session at 244,941 ounces, while those of
ETFS Physical Palladium shares were steady for a seventh day.
(Editing by James Jukwey)
