UPDATE 2-Gold near 2-½ month high on oil, ETF holdings up

* Gold steady ahead of U.S. jobs report and ECB policy
meeting

* Oil hits another record on persistent supply concerns

* ETF holdings up
(Updates prices, adds activity in physical market)

By Lewa Pardomuan

SINGAPORE, July 3 (Reuters) - Gold was steady near its
highest level in more than two months on Thursday, on inflation
fears driven by record high oil, and gains in ETF holdings
suggested investors were shifting their money back to bullion.

But trading may be slow ahead of U.S. employment data and
an interest rate decision by the European Central Bank, which
will determine the direction of the U.S. dollar and precious
metals.
The physical sector saw sales of scrap from Indonesia but
there was little activity in other consumers in Southeast Asia.
Premiums for gold bars to the spot London prices were unchanged
at between 40 and 60 cents in Singapore <GOLD/ASIA1>.

"I think the market is kind of toppish around here. We are
going to see narrow range trading today," said Ellison Chu,
senior manager at Standard Bank London in Hong Kong.

"I think people would like to keep their books square for
the long weekend," said Chu, referring to Friday's U.S.
Independence Day holiday.

Gold <XAU=> was at $942.65/943.70 an ounce, steady from
$942.60/943.60 an ounce late in New York. It hit a high of
$946.50 an ounce on Wednesday, its strongest level since April
17, as fears of rising energy costs spurred buying.

Gold has rebounded around 8 percent since falling to a
one-week low at $873.50 last week. The rise above a recent high
of $935 also triggered buy signals on charts, but gold was
still below a record high of$1,030.80 hit in March.

Gains in ETF holdings suggested investors regained
confidence in gold after volatile trade in recent weeks, said
Adrian Koh, analyst at Philip Futures in Singapore.

"I think so, judging by how much gold prices have risen in
tandem with the rise in gold holdings. I am still looking at
the $950-$955 regions for resistance and if we do move above
those levels, it's very likely that we could retest the record
high."

Bullion held by SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, rose to 658.57 tonnes, the
highest level since mid-March, when it hit a record high above
663 tonnes. XAUEXT-NYS-TT.

Oil CLc1 hit another record above $144 a barrel after a
drop in U.S. crude inventories raised supply concerns. <O/R>.

In theory, expensive oil lifts gold's appeal as a hedge
against inflation, while a weaker dollar boosts the metal's
appeal as an alternative investment.

The euro hit a two-month high at $1.5893 <EUR=> after ADP
Employer Services said U.S. private-sector employers cut 79,000
jobs in June, the largest drop since November 2002, stirring
worries the jobs report on Thursday may also come in weak.
[USD/]

The single currency was also supported by expectations for
the European Central Bank to raise rates by 25 basis points to
4.25 percent at a policy meeting.

Gold futures for August delivery GCQ8 on the COMEX
division of the New York Mercantile Exchange fell $1.9 an ounce
to $944.7.

Spot platinum <XPT=> was at $2,065.00/2,085.00 an ounce
from $2,065.50/2,085.50 late in New York. Spot palladium <XPD=>
rose to $464.50/472.50 an ounce from $463.00/471.00 an ounce.

Silver <XAG=> barely changed at $18.32/18.38 an ounce.

The most active Tokyo platinum contract for June 2009
delivery <0#JPL:> on the Tokyo Commodity Exchange fell 61 yen
per gram to 6,925 yen.
Precious metals prices at 0617 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 942.40 -1.95 -0.21 13.17
Spot Silver 18.32 -0.01 -0.05 24.04
Spot Platinum 2065.00 -0.50 -0.02 35.86
Spot Palladium 464.50 2.00 +0.43 26.22
TOCOM Gold 3244.00 4.00 +0.12 6.01
31388
TOCOM Platinum 6926.00 -60.00 -0.86 29.72
15808
TOCOM Silver 631.00 5.40 +0.86 16.64
1342
TOCOM Palladium 1628.00 -12.00 -0.73 20.50
841
Euro/Dollar 1.5863
Dollar/Yen 106.03
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Michael Urquhart)