* Gold set for 4th-day losing streak on improved economy
* Technical support lifts bullion off early session lows
* Dollar firms versus euro after raft of upbeat data
* Coming up: Markets eye key December U.S. payrolls Friday
(Recasts, updates prices, market activity, new byline, changes
dateline, previously LONDON)
By Frank Tang
NEW YORK, Jan 6 (Reuters) - Gold fell for a fourth
consecutive session on Thursday as the dollar rose on signs the
U.S. economic outlook was improving, but technical buying
lifted prices off their lows.
Strong economic reports this week including purchasing
managers' indexes, new factory orders and upbeat private-sector
jobs data have driven the dollar higher, diminishing gold's
safe-haven appeal. The data raised expectations that Friday's
key U.S. jobs data will beat forecasts.[] []
"There is always the fear that once the rebound in the U.S.
gets cemented and attracts higher interest rates, investors
start shifting money out of gold and into equities," said
Mitsubishi analyst Matthew Turner.
The S&P 500 <.SPX> stock index was on track for its sixth
straight week of gains, up more than 1 percent so far this week
even after Thursday's slight retreat.
Some investors unwound solid gains made on thin volume in
gold and other precious metals over the holidays. The year-end
rally saw silver hit a series of 30-year highs and palladium
touch a near 10-year peak. Gold had come within $10 of a new
all-time high on Monday.
Spot gold <XAU=> fell 0.3 percent to $1,373.80 an ounce at
12:03 p.m. (1703 GMT) U.S. gold futures for February delivery
<GCG1> were down $1 at $1,372.70.
Spot silver <XAG=> fell 0.2 percent to $29.18 an ounce.
A larger-than-expected rise in weekly initial jobless
claims on Thursday did little to alter investors' view that the
economy is gaining traction, putting gold under pressure.
[]
Oil prices lost $2 to $88 a barrel on the dollar strength,
and industrial metals led by copper also fell 2 percent. The
Reuters-Jefferies CRB <.CRB> index fell 1 percent after the
global commodities benchmark zigzagged in a volatile week.
[] []
TECHNICAL BUYING
On charts, gold cut early losses, bouncing off lows at
around $1,362 an ounce, a key support level in line with a
series of lows set in December, said Adam Hewison, president of
MarketClub.com.
Hewison said gold's bounce up from session lows signals
that it has found support after falling this week.
"Every time when gold had gotten down to these levels, it's
very close to making a reversal higher," he said.
Gold has risen toward its record $1,430,95 an ounce level
three times since November but failed each time.
Investment demand for gold-backed exchange-traded funds
remained lackluster, with holdings of the world's largest gold
ETF, New York's SPDR Gold Trust <GLD>, dropping by nearly four
tonnes on Wednesday to their lowest in early June. []
UBS said in a note that gold could be at risk of a further
short-term correction.
"Market sentiment is shaken, and next week's rebalancing of
the commodity index looms large; how much is already priced in
is up for debate," said UBS in a note.
"In the midst of a short-term commodity depression, a
stronger dollar and, more importantly, growing conviction in
the U.S. recovery as macro data improves, gold is struggling to
assert itself," UBS added.
Platinum <XPT=> inched up 0.1 percent to $1,729 an ounce
and palladium <XPD=> dropped 1.5 percent to $761.47 after
rising above $800 an ounce, its highest in nearly 10 years.
Prices at 12:32 p.m. EST (1732 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCG1> 1372.50 -1.20 -0.1% -3.4%
US silver <SIH1> 29.245 0.047 0.2% -5.5%
US platinum <PLJ1> 1733.80 -0.30 0.0% -2.5%
US palladium <PAH1> 763.50 -11.80 -1.5% -5.0%
Gold <XAU=> 1372.60 -5.05 -0.4% -3.3%
Silver <XAG=> 29.22 -0.02 -0.1% -5.4%
Platinum <XPT=> 1727.24 0.74 0.0% -2.3%
Palladium <XPD=> 759.72 -13.28 -1.7% -5.0%
Gold Fix <XAUFIX=> 1368.50 -7.50 -0.5% -3.0%
Silver Fix <XAGFIX=> 29.08 -13.00 -0.4% -5.1%
Platinum Fix <XPTFIX=> 1731.00 4.00 0.2% 0.0%
Palladium Fix <XPDFIX=> 766.00 4.00 0.5% -3.2%
(Additional reporting by Jan Harvey and Amanda Cooper in
London; Editing by David Gregorio)
