NEW YORK/LONDON (Reuters) - Gold prices firmed on Friday in holiday-thinned trading, after data showing U.S. employers added the fewest jobs in over a year in March fuelled speculation that a U.S. interest rate hike may be delayed.
Non-farm payrolls increased by 126,000 last month, the smallest gain since December 2013, the Labor Department said on Friday. That ended 12 straight months of job gains above 200,000, the longest streak since 1994.
Spot gold XAU= was up 0.7 percent at $1,210.20 an ounce by 3:10 p.m. EST (1910 GMT), after easing 0.2 percent on Thursday. U.S. gold for June delivery GCcv1 settled unchanged at $1,200.90 an ounce.
"Investors are dialling back on the rate hike expectations," Naeem Aslam, chief market analyst at Ava Trade, said. "This translates as good news for gold, but bad news for the dollar."
The data has led to speculation that the Federal Reserve may delay its first increase in U.S. interest rates in nearly a decade, which had been expected later this year.
The dollar tumbled as much as 1 percent against the euro after the significantly weaker-than-expected report, while U.S. Treasuries rose, with benchmark 10-year yields hitting nearly two-month lows. [FRX/] [US/]
"The payroll figure is a lot weaker than anybody had anticipated," said Jim Kochan, chief fixed income strategist at Wells Fargo Funds Management. "These numbers suggest we won't see the funds rate increase at the June Fed meeting and the onset of policy normalization until later this year."
Gold tends to suffer when rates rise, as that increases the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which the metal is priced.
Gold jumped nearly 2 percent on Wednesday in its sharpest one-day gain in two months, after U.S. private hiring in March missed market forecasts, suggesting Friday's more comprehensive employment report could also underwhelm.
Trading was expected to be lean for most markets, including those in the United States and Europe, shut for the Good Friday holiday.
Among other precious metals, platinum XPT= was up 0.5 percent at $1,155 an ounce, while palladium XPD= was down 0.5 percent at $740.65 an ounce. Silver XAG= was up 1.7 percent at $17 an ounce.
Additional reporting my Manolo Serapio Jr in Singapore; Editing by David Holmes