Gold headed for weekly rise; US jobs data in focus

SINGAPORE: Gold ticked lower on Friday after recent gains prompted investors to book profits, but the metal was heading for a small weekly rise before the release of key US employment data that may show modest growth in the economy.

Although weaker prices attracted buying from jewellers in China and Thailand, most investors turned their attention to the US data after a Reuters survey of economists showed nonfarm payrolls are expected to have risen 160,000, a marginal step up from December's 155,000 job gain.

"Investors are still trading on news, particularly from the United States," said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore. "Precious metals haven't gotten their safe haven status back fully yet."

With the nonfarm rolls coming out, investors probably prefer to take profits before planning their next move, he said.

Gold eased $1.13 to $1,661.86 an ounce by 0329 GMT -- still on course for a weekly rise of 0.2 percent. It hit a near one-week peak of $1,683.39 on Wednesday after data showed the US economy unexpectedly shrank in the fourth quarter.

US COMEX gold futures for February was at $1,661.60 an ounce, up $1.00.

"If the data released is better than expected, people will tend to move back to stocks as opposed to buying into precious metals," Lan said.

Shares in Asia wiped earlier gains on Friday as a tepid Chinese manufacturing report dented sentiment, while the euro was its highest level since November 2011 on diminishing worries about Europe's debt crisis.

US stocks edged lower on Thursday on caution ahead of the jobs report, but the benchmark Standard & Poor's 500 Index .SPX posted its best monthly gain since October 2011 with a 5.1 percent rise and the best January showing since 1997.

The euro's strength pushed the dollar index to its lowest since late December, which in theory should have boosted gold prices.

Gold rallied to a record of around $1,920 in September 2011, when a worsening debt crisis in Europe sparked a buying rush. Previous rounds of asset purchases by the US Federal Reserve had also weakened the dollar, prompting investors to turn to gold as a hedge against inflation.

"There's a little buying on the physical side because premiums are slightly cheaper at $1 an ounce. There's some buying from mainland China," said a dealer in Hong Kong, where premiums for gold bars fetched $1.20 last week.

"But I think gold is a bit tired after it failed to break $1,700 an ounce."

In other precious metals, silver edged up, but platinum and palladium tracked gold lower.

The CME Group said it will add platinum and palladium options onto its Globex electronic platform beginning late in February in a move to capitalize on growing investor interest in platinum group metals (PGMs).