PRECIOUS-Gold up, faces headwind from Wall Street rally

* Gold up as Wall St climbs for 2nd day, dollar rises
* Upbeat US jobs, factory data, Fed survey paint bright
outlook
* South Korea's central bank buys 20 tonnes of gold in Feb.
* Coming up: US jobless claims and productivity Thursday

By Frank Tang and Natalie Huet
NEW YORK/LONDON, March 6 (Reuters) - Gold rose on Wednesday,
but analysts expect the breakout in Wall Street stocks to new
highs and data showing an improving U.S. economy to pressure the
precious metal's safe-haven appeal.
News of another gold purchase by South Korea's central bank
last month and hopes that outflow in gold-backed exchange-traded
funds will peter out soon gave support. Bullion has now risen
for a second day after its four-session losing streak.
The U.S. equities market resumed its climb into uncharted
territory, with the Dow setting an intraday record for a
second session on encouraging jobs and factory data. An
extensive survey by the Federal Reserve's regional branches
showing continued economic growth in January also boosted the
stock market.
"You are going to get less people interested in defensive
plays like the precious metals. People are more into buying
equities in a risk-on type environment," said Phillip Streible,
senior commodities broker at futures brokerage RJ O'Brien.
Spot gold was up 0.4 percent at $1,580.70 an ounce by
2:42 p.m. EST (1942 GMT), moving in a narrow range of less than
$20.
Bullion prices are down nearly 6 percent so far this year
and down about 18 percent from a record high of $1,920.30 an
ounce hit in September 2011.
U.S. COMEX gold futures for April delivery settled
unchanged from Tuesday's close at $1,574.90, with trading volume
about 20 percent below its 30-day average, preliminary Reuters
data showed.
The metal reversed early losses and appeared to find support
near Friday's low at around $1,565.
Gold was underpinned as deflationary worries eased after the
U.S. House of Representatives passed legislation to keep federal
funds flowing to government agencies through Sept. 30, seeking
to avert shutdowns that otherwise would begin on March 27 when
current funding expires.
Bullion rebounded into the headwind of a strong dollar,
which benefited from a falling euro on speculation about future
interest-rate cuts a day before a European Central Bank
policy-setting meeting.
The ECB, the Bank of England and the Bank of Japan are all
expected to stick to ultra-easy monetary policy at meetings on
Thursday, following assurances by Federal Reserve officials that
their stimulus program remains in place.
Silver rose 0.8 percent to $28.90 an ounce.

SOUTH KOREA BUYS GOLD
Official-sector gold buying this year has helped offset
lackluster investor interest.
South Korea's central bank bought 20 tonnes of gold in
February in the fifth purchase of the metal in less than two
years, taking total holdings to 104.4 tonnes.
But continued outflows from gold-backed exchange-traded
funds underscored sober investor sentiment for the metal.
Bullion holdings in the SPDR Gold Trust, the world's
biggest gold ETF, fell for an 11th session on Tuesday to a
16-month low of 1,244.855 tonnes.
Among other precious metals, platinum eased 0.4
percent to $1,579.99 an ounce, while palladium gained 1.3
percent to $742.72 an ounce.
2:42 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold APR 1574.90 0.00 0.0 1566.40 1584.30 154,258
US Silver MAY 28.803 0.199 0.7 28.520 29.140 35,617
US Plat APR 1579.80 -5.90 -0.4 1574.50 1603.00 10,469
US Pall JUN 740.05 5.45 0.7 737.55 746.70 3,162

Gold 1580.70 5.64 0.4 1568.23 1584.40
Silver 28.900 0.240 0.8 28.590 29.060
Platinum 1579.99 -5.76 -0.4 1579.25 1600.25
Palladium 742.72 9.25 1.3 738.50 743.00

TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 168,276 203,578 175,860 14.74 -0.39
US Silver 38,306 64,311 52,920 23.47 -0.41
US Platinum 10,773 13,553 10,852 18.93 0.58
US Palladium 3,534 9,054 5,263