US MIDDAY: gold slightly down

US gold futures were off their early lows on Friday as the dollar's rise following a strong jobs report stalled, and robust buying by physical buyers could support the precious metal in the near term, dealers said.
The move by gold producer Newmont Mining Corp to eliminate its entire 1.85 million-ounce gold hedge position was seen as a bullish sign among market-watchers as it encouraged other miners to also buy back their hedge positions. At 9:51 am EDT (1351 GMT), most-active gold for August delivery on the COMEX division of the New York Mercantile Exchange was down 90 cents at $649.70 an ounce, dealing between $646.70 and $652.40.
Andy Montano, a director at bullion dealer ScotiaMocatta, said that gold fell early on a stronger dollar against the euro after a better-than-expected US employment report in June.
"The job report came out and certainly it was positive for the US economy," Montano said. US employers added a solid 132,000 new jobs in June and boosted payrolls more strongly than previously thought in April and May. The June hiring figure topped forecasts for 120,000 jobs made by Wall Street economists surveyed by Reuters.
A stronger greenback makes gold, which is denominated in US dollars, more expensive for holders of other currencies. Montano said that he saw fairly good physical buying in bullion even though demand has slowed in the summer months.
On Thursday, Denver-based Newmont, the world's second-biggest producer after Canada's Barrick Gold Co, said it would get rid of all its hedge positions and was mulling a possible sale or public offering of its merchant banking business.
UBS Investment Bank said in a note to clients that Newmont's moves would ratchet up the pressure on other gold miners with outstanding, and in some cases, much larger hedge books.
"Newmont's move is another clear indication that mining companies remain ideologically against hedging and that aggregate producer de-hedging will likely continue," UBS said. Spot gold was at $648.00/$648.80, compared with $649.30/$650.10 late trade on Thursday. The London morning gold fix was set at $647.75. The silver market largely ignored news about Mexican miners' labour actions in a protest over safety conditions and a long-running power struggle in the union.
Only a handful of Mexican mines appeared to suffer from a one-day strike on Thursday over safety conditions and a long-running power struggle in the union.
Work slowed at Penoles' silver mine in Fresnillo, although operations continued normally at the company's Metmex silver and gold refinery, spokesman Luis Rey Delgado told Reuters.
COMEX September silver was up 2.50 cents at $12.605 an ounce, trading between $12.420 and $12.650. Spot silver was quoted at $12.49/12.53, which was higher than the late Thursday quote of $12.48/12.53. London silver was fixed at $12.400. NYMEX October platinum inched up 20 cents to $1,304.00 an ounce. Spot platinum traded at $1,287/1,291. September palladium gained $1.45 to $366.70 an ounce. Spot palladium fetched $362/365.