* Gold ETF holdings hit record high
* Spot gold breaches 100-day moving average
* Coming up: U.S. non-farm payrolls data, Nov; 1330 GMT
By Rujun Shen
SINGAPORE, Dec 7 Gold nudged higher on Friday,
extending gains from the previous session when bullion was
boosted by prospects of future interest cuts by the European
Central Bank, but the precious metal was headed for its second
straight week of decline.
The euro zone economy is likely to further shrink in 2013,
the European Central Bank predicted on Thursday, fanning
expectations that the bank may cut rates next year in the face
of another contraction in the economy.
Monetary easing from central banks has been a key factor
driving gold's nearly 9-percent rise this year. Investors flee
to gold when they fear the value of fiat currencies is
threatened by rampant cash printing by central banks.
Investors are watching the progress in the talks in
Washington on how to avoid an imminent fiscal calamity, as the
deadline to avert the $600 billion tax hikes and spending cuts,
known as the "fiscal cliff", looms large.
Though gold fell to a one-month low earlier this week,
investors remained confident in the outlook of the precious
metal, as they piled into gold-backed exchange-traded funds,
whose holdings hit a record high for a second consecutive day.
"Gold's fundamentals are intact," said Chen Min, an analyst
at Jinrui Futures in the southern Chinese city of Shenzhen.
"Investors seem to regard $1,690 as an attractive level to
On the chart, spot gold breached the 100-day moving average,
which had been a support level until earlier week. The moving
average stood just above $1,701 an ounce.
Spot gold inched up 0.2 percent to $1,702.04 an ounce
by 0715 GMT, on course for a 0.8-percent loss for the week and
its second weekly drop.
U.S. gold was little changed at $1,703.20.
As prices rebounded, the physical buying that had emerged in
the past few days when prices fell below $1,700 dried up.
"People want to minimise their stockpiles before the year
end," said Ronald Leung, a dealer at Lee Cheong Gold Dealers in
Hong Kong, adding that premiums were about 70 cents to $1.20 an
ounce above London prices.
He warned of a spike in premiums around the year end when
refineries outside Asia close for holidays.
On the macro front, investors will watch the U.S. non-farm
payrolls data, due at 1330 GMT, expecting it to show a sharp
drop in job growth in November as superstorm Sandy disrupted
economic activity. The unemployment rate is seen holding steady
at 7.9 percent.
The figures follows Thursday's data showing the number of
Americans filing for jobless claims last week fell to a
pre-Sandy range, suggesting a return to a modest job growth
after a storm-related set back.
Spot palladium was little changed at $690.47, headed
for a 1.3-percent weekly rise in its sixth week of straight
gains, its longest winning streak in nearly two years.
Precious metals prices 0715 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1702.04 3.42 +0.20 8.84
Spot Silver 33.04 0.06 +0.18 19.32
Spot Platinum 1595.99 3.49 +0.22 14.57
Spot Palladium 690.47 0.47 +0.07 5.82
COMEX GOLD DEC2 1703.20 1.40 +0.08 8.71 11549
COMEX SILVER MAR3 33.13 0.01 +0.03 18.66 3086
COMEX gold and silver contracts show the most active months
(Editing by Miral Fahmy)