* ECB cancels soft treatment of Greek debt
* Gold trapped in narrow ranges ahead of US nonfarm payrolls
* Coming Up: U.S. weekly jobless claims; 1330 GMT (Updates prices)
By Manolo Serapio Jr
SINGAPORE, Feb 5 (Reuters) - Gold rose for a second session on Thursday, supported by uncertainty in Greece that has cut investor interest in risky assets and China’s efforts to spur its slowing economy.
But bullion was largely trading in a narrow range ahead of Friday’s U.S. employment data that may provide more clues on when U.S. interest rates would rise this year, the first hike in nearly a decade.
The European Central Bank said it will no longer accept Greek bonds as collateral for its liquidity operations, dealing a blow to Athens which is seeking debt relief from euro zone lenders. Asian stocks retreated.
“We think the Greek issue will likely stir things up for a little while longer in the markets which is why we think gold should benefit, likely at the expense of equities,” INTL FCStone analyst Ed Meir said in a note.
Spot gold was up 0.2 percent at $1,271.81 an ounce by 0633 GMT, adding to a 0.8 percent gain on Wednesday.
U.S. gold for April delivery rose 0.6 percent to $1,272.60 an ounce.
China’s move on Wednesday to cut the reserve requirement for banks in an effort to add more liquidity to fight off an economic slowdown and looming deflation also continued to support gold prices.
Beijing’s move followed similar efforts by other central banks in the world to stimulate economic activity. Gold has historically benefited during periods of easier global monetary policies amid increased liquidity and low interest rates.
But investors were more focused on the next U.S. nonfarm payrolls data. A Reuters poll of analysts had forecast a 230,000 increase in U.S. jobs in January, slowing slightly from 252,000 in December but still robust.
“The entire notion right now is for the U.S. to continue improving at least from the labour front,” said Barnabas Gan, analyst at OCBC Bank.
“Higher interest rates and a firmer dollar really are strong drivers to depress gold prices this year,” said Gan, who sees bullion at $1,000 by year-end. Precious metals prices 0633 GMT Metal Last Change Pct chg YTD pct chg Spot Gold 1271.81 2.16 +0.17 7.46 Spot Silver 17.43 0.07 +0.40 11.30 Spot Platinum 1241.25 5.25 +0.42 3.45 Spot Palladium 792.80 3.55 +0.45 0.01 COMEX GOLD APR5 1272.60 8.10 +0.64 7.47 COMEX SILVER MAR5 17.44 0.05 +0.26 11.80 Euro/Dollar 1.1339 Dollar/Yen 117.11 COMEX gold and silver contracts show the most active months (Reporting by Manolo Serapio Jr.; Editing by Richard Pullin and Anupama Dwivedi)