April 3, 2015 / 2:37 AM / 3 years ago

PRECIOUS-Gold slips below $1,200 as dollar firms ahead of US payrolls

* Weak U.S. jobs data may provide limited boost to gold
    * Thin trading with most markets shut for Easter break

    By Manolo Serapio Jr
    SINGAPORE, April 3 (Reuters) - Gold fell below $1,200 an
ounce on Friday as the dollar regained some lost ground ahead of
a U.S. jobs report that will provide clues on when the Federal
Reserve will hike interest rates.
    U.S. nonfarm payrolls are forecast to show a rise of 245,000
in March after gaining 295,000 in February, according to a
Reuters poll of economists. 
    A weaker-than-expected report could, however, prompt
investors to increase bets that the Fed might hold off on
raising interest rates until later this year, buoying safe-haven
assets such as gold.
    Spot gold was off 0.2 percent at $1,199.36 an ounce
by 0158 GMT, set to end the week flat after a two-week climb.
    Gold jumped nearly 2 percent on Wednesday in its sharpest
single-day gain in two months after U.S. private hiring in March
missed market forecasts, suggesting Friday's more comprehensive
employment report could also come in below estimates.
    While a weaker U.S. nonfarm payrolls would support bullion,
only an extremely poor outcome would sustain any price rally,
HSBC analyst James Steel said.
    "Given the steepness of the rally this week in reaction to
the (U.S. private hiring) numbers, job gains would likely have
to be very disappointing to further boost bullion near term,"
Steel said in a note.
    "A stronger jobs number is more likely to have a greater
impact to the downside for gold."
    Gold is particularly sensitive to shifts in U.S. interest
rates, which also move the dollar, in which the metal is priced.
    The dollar was slightly firmer against a basket of major
currencies on Friday after two days of losses fuelled by
anticipation that the U.S. employment report could disappoint.
    Trading activity is expected to be lean with most markets,
including those in the United States and Europe, shut for the
Good Friday holiday. 
  Precious metals prices 0158 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    
  Spot Gold        1199.36   -2.48   -0.21      1.34
  Spot Silver        16.73    0.02   +0.12      6.83
  Spot Platinum    1149.50    0.00   +0.00     -4.20
  Spot Palladium    744.90    0.32   +0.04     -6.03
  Euro/Dollar       1.0869
  Dollar/Yen        119.65
  COMEX gold and silver contracts show the most active months
 (Editing by Himani Sarkar)
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