* Gold dips under $930 after jobs data dims inflation fear
* Volatile currency could further dent dollar-hedge buying
* Glimmers of hope for PGMs as auto sales decline slows
(Recasts, updates with quotes, closing prices, changes
dateline, pvs LONDON)
By Frank Tang
NEW YORK, July 2 (Reuters) - Gold futures briefly fell
below $930 an ounce on Thursday, losing 1 percent as
worse-than-expected U.S. nonfarm payroll losses decreased
gold's appeal as a hedge against inflation and bolstered the
dollar.
A gloomy job market combined with still no clear signs of
economic recovery indicated general price levels would not go
into an upward spiral any time soon, dampening gold's appeal as
a classic hedge against inflation.
U.S. employers cut 467,000 jobs in June, far more than
expected, while the unemployment rate rose to 9.5 percent, a
government report showed on Thursday.
"The data is clearly noninflationary. There is no imminent
inflation ... so I would view it as a negative for gold from
that standpoint," said Bill O'Neill, managing partner of New
Jersey-based LOGIC Advisors.
Deflation worries and a volatile dollar have sent the price
of gold reeling after the metal rose toward the $1,000-an-ounce
level in early June but was met with heavy resistance.
U.S. August futures <GCQ9> settled down $10.30, or 1.1
percent, at $931 an ounce on the COMEX division of the New York
Mercantile Exchange.
Spot gold <XAU=> traded at $930.50 an ounce at 2:01 p.m.
EDT (1801 GMT), against $939.95 late in New York on Wednesday.
Investors have increasingly viewed the dollar as a safe
haven, and the worse-than-expected economic data sparked a
flight to quality into the dollar, making gold pricier for
holders of other currencies.
While gold is traditionally seen as a safe-haven asset,
moves in the dollar are taking precedence as the metal's main
price driver.
"The dollar has gone up because the data has made everyone
nervous, buying government bonds as a safe-haven asset," said
Matthew Turner, an analyst at VM Group.
Weaker physical demand as a result of higher bullion prices
also weighed down on the metal. Gold jewelry buying represents
about 60 percent of annual gold demand.
Indian imports were likely down by more than half in June
from the same month a year ago, while imports into Turkey rose
to 4.336 tonnes in June from zero the previous month, according
to data from the Istanbul Gold Exchange. []
New York energy and commodity markets will be closed Friday
in observance of the U.S. Independence Day on July 4. The
markets will reopen as usual on Monday.
GLIMMERS OF HOPE FOR PLATINUM?
Meanwhile, precious metals that have bigger industrial
usage component -- silver, platinum and palladium -- also
declined, pressured by the stronger dollar and reflecting
losses on the base metals market.
For platinum group metals, market watchers said that U.S.
auto sales in June offered glimmers of hope as the results
pointed to more stability for the economy, but fell short of a
turnaround for the auto market after a punishing four-year
decline.
Platinum and palladium are employed as autocatalysts to
clean tailpipe emissions from vehicles. The auto industry
accounts for about 60 percent of total platinum demand.
Platinum <XPT=> fell to $1,187.50 against $1,198.50, and
palladium <XPD=> dipped to $249 from $252.00, while spot silver
<XAG=> dropped to $13.39 per ounce from $13.74 quoted in New
York,
Close Change Pct 2008 YTD
Chg Close Pct Chg
US gold <GCQ9> 931.00 -10.30 -1.1 884.30 5.3
US silver <SIU9> 13.408 -0.352 -2.6 11.295 18.7
US platinum <PLV9> 1193.30 -11.80 -1.0 941.50 26.7
US palladium <PAU9> 252.00 -2.85 -1.1 188.70 33.5
Prices at 2:03 p.m. EDT (1803 GMT)
Gold <XAU=> 930.85 -9.10 -1.0 878.200 6.0
Silver <XAG=> 13.39 -0.35 -2.5 11.30 18.5
Platinum <XPT=> 1187.50 -11.00 -0.9 924.50 28.4
Palladium <XPD=> 249.00 -3.00 -1.2 184.50 35.0
Gold Fix <XAUFIX=> 929.50 -8.75 -0.9 836.50 11.1
Silver Fix <XAGFIX=> 13.410 -0.240 -1.8 14.760 -9.1
Platinum Fix <XPTFIX=> 1185.00 0.00 0.0 1529.00 -22.5
Palladium Fix <XPDFIX=> 249.00 0.00 0.0 365.00 -31.8
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Prices in dollars per ounce.
2008 close for U.S. gold second contract month, U.S. silver and
palladium third contract months and U.S. platinum fourth
contract month.
(Additional reporting by Nick Vinocur and Jan Harvey)
