PRECIOUS-Gold at 6-mth high ahead of ECB meeting, U.S. payrolls

* Gold looks neutral around $1,693 -
technicals
* Coming Up: Euro zone ECB rate decision; 1145 GMT

(Updates prices, adds comment)
By Lewa Pardomuan
SINGAPORE, Sept 6 (Reuters) - Bullion tracked the euro
higher on Thursday and rose to its highest since March ahead of
a meeting of the European Central Bank later in the day that
could bring the announcement of new policies to help contain the
euro zone's debt crisis.
But many investors are likely to turn their attention to
U.S. non-farm payrolls data due on Friday, with a
weaker-than-expected number likely to bolster expectation of
more quantitative easing by the Federal Reserve, probably later
this month.
Gold rose 0.59 percent to $1,703.00 an ounce by 0710
GMT. U.S. gold futures for December added $11.50 to
$1,705.50 an ounce.
"There's a lot of event risk in the market at the moment.
People seem to be positioning for a relatively positive outcome
from the ECB, and that's probably why we are testing $1,700
right now," said Nick Trevethan, senior metals strategist at ANZ
in Singapore.
"If they come up with a clear and relatively detailed policy
framework, we could see gold up another $10 or $15, or maybe
more. If they are less clear than the market hopes, then prices
could fall back. We see support around the $1,676 level."
Other precious metals rose as gold rallied, with silver
and platinum rising to their strongest levels
since April. U.S. Fed Chairman Ben Bernanke's comment on the
grave condition of the U.S. labour market last week had prompted
investors to buy gold as a hedge against inflation.
Sources told Reuters that the ECB was ready to waive
seniority status on government bonds it buys under a new
programme, which it is set to agree upon at Thursday's Governing
Council meeting.
"I think (the ECB) is going to buy sovereign bonds. But the
market is a bit overbought already. Everyone is betting the QE3
is coming. I think the downside is limited even though a
correction is coming," said Ronald Leung, director of Lee Cheong
Gold Dealers in Hong Kong.
"It's all very quiet in the physical market," said Leung,
adding that gold was likely to find support at $1,670-$1,680.

Gold, typically a safe-haven asset, has often tracked the
fortunes of the euro and stocks, with speculators selling the
metal for cash to cover losses in other markets as the euro zone
debt crisis caused turbulence in financial markets.
The metal has risen on talk that the ECB will launch a
programme of purchasing Italian and Spanish bonds, with other
steps aimed at lowering borrowing costs for debt-saddled
countries.
Stocks edged higher on Thursday and the euro held on to the
previous session's gains on hopes that the ECB would unveil new
tactics to curb surging borrowing costs in indebted euro zone
states.
But thin trading suggested that some gold investors had
expected the ECB to announce the new buying programme, while
selling persisted in the physical market ahead of the payrolls
data and as bullion prices held near highs.
The first two rounds of U.S. quantitative easing have lifted
gold prices, which have doubled in the last four years. The
Fed's next policy meeting is scheduled for next week, but the
U.S. jobs report on Friday could affect the decision.
"Physical selling is still there, and Thailand is the most
active seller," said a physical dealer in Singapore. "We are
also seeing gold bars coming from Indonesia."

Precious metals prices 0710 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1703.00 9.96 +0.59 8.90
Spot Silver 32.80 0.55 +1.71 18.45
Spot Platinum 1578.24 13.44 +0.86 13.30
Spot Palladium 644.47 4.47 +0.70 -1.23
COMEX GOLD DEC2 1705.50 11.50 +0.68 8.85 21422
COMEX SILVER DEC2 32.85 0.52 +1.61 17.68 8639
Euro/Dollar 1.2613
Dollar/Yen 78.40

COMEX gold and silver contracts show the most active months

(Editing by Chris Lewis and Robert Birsel)