* Dollar regains lost ground against yen, euro
* SPDR gold ETF holdings decline another 5 tonnes
* Platinum, palladium at multi-month highs on ETF news
(Recasts, updates with comments, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Jan 7 (Reuters) - Gold prices fell on
Thursday as the dollar rose broadly ahead of a key U.S.
employment report and as bullion investors took profits after
recent gains.
Platinum and palladium hit multi-month highs, meanwhile,
after confirmation that the first U.S. platinum- and
palladium-backed exchange-traded funds (ETFs) will be launched
on Friday. Platinum group metals prices later traded flat as
investors had long anticipated the news.
Spot gold <XAU=> was at $1,133.50 an ounce at 2:58 p.m. EST
(1958 GMT), against $1,137.90 late on Wednesday. Prices climbed
4 percent in the first three trading sessions of 2010 to a
three-week high of $1,140.20, but struggled for traction as the
dollar recovered.
"There is still a lot of enthusiasm for commodities as an
asset class, and for precious metals and gold particularly,"
said Tom Kendall, precious metals strategist at Mitsubishi
Corp.
"But it has got to work against some of the dollar strength
we have seen recently. That is going to act as a brake on the
market," he added.
U.S. February gold futures <GCG0> on the COMEX division of
the NYMEX ended $2.80 lower at $1,133.70 an ounce.
In the short term, the dollar remains the main price
driver. The U.S. currency rose broadly a day before the
released of a closely watched U.S. government jobs report,
expected to show two years of job losses in the U.S. economy
ended last month.
"With the employment report coming in tomorrow, there is a
lot of caution in all the markets," said Bill O'Neill, partner
at LOGIC Advisors. "Gold has had a nice run since the beginning
of the year and is due for some consolidation."
Commodity prices were also pressured by news of tighter
monetary policy in China, a major consumer of industrial raw
materials.
China's central bank surprised markets by raising the
interest rate on its three-month bills for the first time since
August, intensifying its grip on liquidity a day after it
promised to keep credit growth in check. []
Further selling was seen from the world's largest gold
exchange-traded fund, the SPDR Gold Trust <GLD>, on Wednesday,
with its holdings down 4.876 tonnes. They have declined nearly
10 tonnes in the first three trading days of 2010. []
PLATINUM, PALLADIUM ETFS
Among other precious metals, silver <XAG=> was at $18.27 an
ounce against $18.18, while platinum <XPT=> was at $1,552 an
ounce versus $1,555 and palladium <XPD=> at $421.50 versus
$426.
Earlier in the session, platinum matched the 16-month high
it hit on Wednesday at $1,561 and palladium reached its firmest
since July 2008 at $431.50 on news of the new exchange-traded
products.
NYSE Euronext said the funds, operated by a U.S. subsidiary
of London's ETF Securities, will trade on the NYSE Arca
platform. []
"Everybody tends to rush into gold when they think of
precious metals, but platinum has the added benefit of a high
level of industrial input," O'Neill said.
"With the growth of car usage in India and China, demand
for platinum group metals should be quite buoyant. It is going
to attract a lot more attention in the future," he added.
Traders say the ETPs, which will issue securities backed by
physical stocks of the precious metals, could see significant
inflows of platinum and palladium on their launch.
(Editing by Christian Wiessner)
