January 5, 2018 / 11:14 AM / 10 months ago

PRECIOUS-Gold dips from 3-1/2 month high ahead of U.S. payrolls data

    * Gold still on track for fourth week of gains
    * U.S. non-farm payrolls data due at 1330 GMT
    * GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices)
    By Jan Harvey
    LONDON, Jan 5 (Reuters) - Gold eased from the previous day's
3-1/2 month peak on Friday as the dollar edged higher ahead of
key U.S. non-farm payrolls data due later, which will be closely
watched for clues on the outlook for Federal Reserve policy. 
    The metal remains on track for a fourth straight weekly
gain, however, for the first time since April. It has risen 1.2
percent in the first trading week of the year, having climbed by
 13 percent in 2017.  
    Spot gold        was down 0.4 percent at $1,317.36 an ounce
by 1225 GMT, off Thursday's high of $1,325.86. U.S. gold futures
       for February delivery were down $3 at $1,318.60. 
    Market participants will be closely watching Friday's
payrolls data for December for further signs of strength in the
world's biggest economy. 
    The report is expected to show job gains of 190,000 for last
month, according to a Reuters survey. Firmer data could
strengthen the case for a faster pace of U.S. interest rate
increases. That would weigh on gold, which as a non-yielding
asset is highly exposed to interest rates.
    "We think that the path of least resistance is skewed to the
upside and the upcoming data would have to beat on so many
matrices to push the gold price below the $1,300 mark," said
Think Markets chief market analyst Naeem Aslan.
    "Volatility could see a big bump if we see some really
dramatic colour in the U.S. NFP number, otherwise it is (a case
of) more calm sailing." 
    Data from the ADP Research Institute showed on Thursday that
U.S. private employers added 250,000 jobs in December, the
biggest monthly increase since March. Economists surveyed by
Reuters had forecast a gain of 190,000 jobs.             
    Among other precious metals, palladium        was down 0.2
percent at $1,093.97, also retreating after hitting a record
high of $1,105.70 on Thursday. 
    It was the best performer among major precious metals last
year, rising 56 percent on fears that rising demand for the
autocatalyst metal would further tighten the market after years
of deficit.
    "Prevailing bullish sentiment and the encouraging technical
trend have pushed palladium prices to record highs," Julius Baer
said in a note. "We believe this is at odds with a slowdown in
global car sales growth. Related headlines should eventually
cool sentiment, trigger profit-taking and lead to a price
    Spot silver        was down 0.5 percent at $17.15 after
touching its highest in more than six weeks at $17.27 in the
previous session. 
    Spot platinum        was 0.5 percent higher at $964.20 an
ounce. It hit a 3-1/2 month peak at $965.40 on Thursday.

 (Reporting by Nallur Sethuraman in Bengaluru; Editing by David
Goodman and Mark Potter)
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