LONDON: Gold prices fell on Friday, heading for their first weekly loss in three, as the dollar hit four-year highs against the yen and stocks rose after upbeat jobs data fuelled optimism over the US recovery.
Gold prices are set to end the week down more than 1 percent after their recovery from April's more than two-year lows ran out of steam above $1,480 an ounce.
Spot gold was down 0.5 percent at $1,450.90 an ounce at 0844 GMT, while US gold futures for June delivery were down $16.70 an ounce at $1,451.90.
The dollar hit a four-year high against the yen on Friday, European shares rose and safe-haven German Bunds eased after US jobs data beat forecasts and on signs Japanese investors have begun buying foreign bonds.
Rising optimism over the US recovery has boosted the appeal of assets like stocks at gold's expense, and called into question the scope of the Federal Reserve's quantitative easing programme, a major support to bullion in recent years.
"The Fed may step up QE or step down QE depending on how the economy performs," Credit Agricole analyst Robin Bhar said. "So far, the data seems to be improving, which suggests they're likely to take their foot off the pedal. That would argue for weaker gold."
"I notice the dollar's very strong, particularly against the yen," he added. "So it's difficult to come up with any positives for gold. I think rallies should be sold."
ETF REPORTS INFLOW
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, reported its first inflow since March 19 on Thursday, of 2.7 tonnes.
"(This is) not a huge amount, and we've seen this head-fake before, but if this is a turning point for the market, it will remove one of the factors that led to the sharp drop off in gold prices and held back the recovery," ANZ said in a note.
The SPDR's holdings have declined sharply in recent months, and are down 167.1 tonnes so far in the second quarter, worth around $7.789 billion at today's prices.
Spot platinum was down 0.1 percent at $1,500.24 an ounce, while spot palladium was down 0.5 percent at $700.72 an ounce.
Platinum group metals traders are awaiting a new plan later on Friday from major producer Anglo American Platinum on restoring profits, after the original provoked a backlash from the government and unions.
South African labour activists promised on Friday to fight any job cuts by Amplats, which had envisaged slashing 14,000 jobs and mothballing two mines. Industry sources told Reuters the final plan would demand as few as 5,000 redundancies.
Both platinum group metals are set to end the week higher, with platinum currently up 0.3 percent and palladium up 1.3 percent.
Silver was flat at $23.66 an ounce. It is close to its cheapest compared to gold in 2-1/2 years. The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, is at 61.35.
"The risk is a top-side break out of the pattern to target the previous high of 68.69 from August 2010," ScotiaMocatta said in a note.
Week-on-week silver was down 1.7 percent.
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