PRECIOUS-Gold ticks higher after U.S. jobs data

                                
 * U.S. private sector cut 697,000 jobs in Feb
* SPDR Gold ETF sees no new inflows, iShares Silver dips
                                
 * Gold scrap sales surge in Asia
 (Releads, updates prices, adds comment)
                                
 By Jan Harvey
                                
 LONDON, March 4 (Reuters) - Gold ticked higher in Europe on
Wednesday after a report showed further signs of deterioration
in the U.S. jobs market, fuelling interest in the precious metal
as a haven from risk.
                                
 Spot gold <XAU=> was at $919.20/919.40 an ounce at 1337 GMT
from $915.70 late in New York on Tuesday. U.S. gold futures for
April delivery <GCJ9> on the COMEX division of the New York
Mercantile Exchange were up $6.30 at $919.90 an ounce.
                                
 But gains were capped by a recovery in other assets such as
stocks, which has diverted interest from gold, and by investors'
worries over slowing inflows into exchange-traded funds.
                                
 Citi analyst David Thurtell said that after recent
multi-year lows there had been some willingness to buy riskier
assets, such as equities, at the expense of gold.
                                
 "There was some news out of China this morning on a possible
new stimulus package and we are seeing some green shoots
elsewhere," he added. "There are some hopeful signs that maybe
the worst has passed, though it is a big maybe."
                                
 Equities rebounded in Europe to break a three-day losing
streak after Asian stocks bounced back earlier on hopes Beijing
will step up efforts to support the Chinese economy.
[ID:nL4476097]
                                
 Index futures are also pointing to a higher opening on Wall
Street, although they pared gains after the jobs data.
                                
 The ADP employment report showed U.S. employment declined by
697,000 private sector jobs in February, the most since the
survey was launched in 2001, while January losses were revised
to 614,000 from 522,000. [ID:nN04352056]
                                
 The numbers are seen as an important precursor to key U.S.
non-farm payrolls data for February, due on Friday.
                                
 Elsewhere data showed China's official Purchasing Managers'
Index saw a third monthly improvement and output rose for the
first time since September, helping prices of industrial
commodities such as oil and base metals to rise [ID:nPEK16693]
                                
 "With all the news in China coming out this morning on the
stimulus package, there might be better opportunities (than
gold) for those who look at commodities specifically," Standard
Bank analyst Walter de Wet said.
                                
 Investors are also concerned over the lack of inflows into
gold-backed exchange-traded funds in recent sessions. Investment
in ETFs made up a significant tranche of demand early this year.
                                
 The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said holdings remained at a record
1,029.29 tonnes as of March 3, unchanged from Feb. 26.
[ID:nT10059]
                                
 The trust's holdings surged by over a quarter or 205 tonnes
in the first six weeks of this year, but have climbed by just
5.2 tonnes in the last fortnight.
                                
 
                                
 DOLLAR
                                
 Among the main external drivers of gold, the dollar
strengthened to a three-month high against the euro. A firmer
dollar usually weighs on gold, which is often bought as a hedge
against weakness in the U.S. currency. [ID:nL4882350]
                                
 The usual relationship between the two assets has broken
down in recent months however, as both reacted to risk aversion.
                                
 Sales of scrap gold have rocketed as prices have risen. Gold
refiners are running at full capacity across Asia as people cash
in jewellery and coins, dealers said. [ID:nSP412638]
                                
 Turkey imported no gold at all for a second month in
February as burgeoning scrap supply met domestic needs.
Jewellery sold in the domestic market was being melted down for
bullion and exported for sale, a new phenomenon. [ID:nL3576842]
                                
 Among other precious metals, spot silver <XAG=> edged up to
$13.03/13.09 an ounce from $12.80. Silver has also suffered from
falling demand from ETFs and even some liquidation, with prices
down 12 percent from the six-month high they hit in February.
                                
 The world's largest silver-backed ETF, the iShares Silver
Trust <SLV>, said its holdings fell for a third successive day
on Tuesday, by three tonnes to 7,981.17 tonnes. They have fallen
nearly 200 tonnes in the last three sessions.
                                
 Spot platinum <XPT=> edged up to $1,044/1,049 an ounce from
$1,031, while spot palladium <XPD=> ticked up to $193.50/198.50
an ounce from $191.50.
 (Editing by Sue Thomas)