PRECIOUS-Gold down 2 pct after strong US nonfarm payrolls

* Gold heading for fourth straight weekly loss
* Bullion falls below key technical support, 100-dma
* Oct U.S. non-farm payrolls data beats expectations

By Frank Tang
NEW YORK, Nov 2 (Reuters) - Gold slid 2 percent in heavy
trade on Friday, breaking below $1,690 an ounce for the first
time in about two months as an encouraging U.S. nonfarm payrolls
report lowered expectations for economic stimulus provided by
global central banks.
Bullion hit a two-month low on Friday and is down almost 2
percent this week for its fourth consecutive weekly decline. The
metal has now erased all its gains after the U.S. Federal
Reserve announced its latest bond-buybacks to boost the job
market in September.
Gold's pullback brought its price near major technical
support near its 100- and 200-day moving averages, after data
showed U.S. employers added 171,000 jobs in October, a hopeful
sign for a lackluster economy that has been a drag on President
Barack Obama's re-election chances.
"Better-than-expected numbers reduced the risk demand for
gold, and a drop below $1,700 an ounce triggered sell-stops and
momentum selling," said James Steel, metals analyst at HSBC.
"There are also long liquidation ahead of elections
triggered by the job number," Steel said.
Spot gold fell 2 percent to $1,680.04 by 12:31 p.m.
EDT (1631 GMT), having touched an eight-week low of $1,679.04.
U.S. COMEX gold futures for December delivery dropped
$34.30 an ounce to $1,681.10, as trading volume on track to
finish sharply above its 250-day average, preliminary Reuters
data showed.
On charts, Friday's sharp pullback sent prices below a key
Fibonacci retracement support and near its 100-day moving
average, a level it has held since mid-August.
"Gold has weakened markedly after slicing below its 50 DMA
line last week which was support and has now become resistance,"
said Adam Sarhan, CEO of Sarhan Capital.
Silver, which tends to be more volatile than gold,
tumbled 3.5 percent to $31.09 an ounce.

EASING EXPECTATIONS TRIMMED
In the longer term, a positive reading on jobs and Friday's
strong U.S. factory orders data could weigh on gold if it trims
expectations for monetary easing.
The U.S. authorities have explicitly tied the extent of
monetary stimulus measures - news of which sent gold above
$1,795 an ounce in October - to the health of the jobs market.
However, while the data was good, analysts say it is far
from a level that would yet stoke fears of an imminent reversal
of the Fed's commitment to easing.
Despite Friday's broad sell-off, platinum and palladium were
both heading for their first weekly gains after three weeks of
straight falls.
Platinum dropped 1.3 percent to $1,544.24 and
palladium fell 1.9 percent to $599.50.

Prices at 12:31 p.m. EDT (1631 GMT)

LAST NET PCT YTD
CHG CHG CHG
US gold 1681.10 -34.30 -2.0% 7.3%
US silver 31.135 -1.113 -3.5% 11.5%
US platinum 1549.00 -24.20 -1.5% 10.7%
US palladium 599.95 -12.50 -2.0% -8.6%

Gold 1680.04 -34.05 -2.0% 7.4%
Silver 31.09 -1.14 -3.5% 12.3%
Platinum 1544.24 -20.26 -1.3% 10.9%
Palladium 599.50 -11.50 -1.9% -8.1%

Gold Fix 1685.00 -23.25 -1.4% 7.0%
Silver Fix 31.92 -74.00 -2.3% 13.3%
Platinum Fix 1552.00 3.00 0.2% 12.4%
Palladium Fix 608.00 0.00 0.0% -4.4%