* Dollar climbs to four-month high vs euro
* Coming up: U.S. December non-farm payrolls, 1330 GMT
* Indian gold imports seen jumping 64 pct in 2010
* Official says China's 2010 gold output hit record
(Updates prices)
By Jan Harvey
LONDON, Jan 7 (Reuters) - Gold slid 1 percent to a near
six-week low in Europe on Friday as the dollar hit a four-month
high versus the euro, but moves in the metal were muted ahead of
keenly anticipated U.S. payrolls data later in the day.
Spot gold <XAU=> touched a low of $1,356.50 an ounce, its
weakest since Nov. 29, and was bid at $1,359.05 an ounce at 1310
GMT against $1,371.15 late in New York on Thursday. The metal is
on track for its worst weekly decline since May last year.
"The United States has had a whole run of decent data, and
that has increased risk appetite and decreased gold's allure as
a hedge," said VM Group analyst Carl Firman.
"If you have a sustained period of good, positive U.S. data,
which points towards a good U.S. recovery, the dollar is bound
to strengthen slightly, and that is generally negative for the
gold price," he added
U.S. gold futures for February delivery <GCG1> fell $13.00
an ounce to $1,358.70.
The dollar hit a four-month high versus the euro and a
one-month peak against a basket of currencies on Friday ahead of
the U.S. jobs data, although dollar bulls risk disappointment if
it falls short of expectations. []
Analysts and economists polled by Reuters predict that U.S.
non-farm payrolls likely increased by 140,000 last month, a
third straight month of gains. []
"Wednesday's record ADP print has fostered much optimism for
a strong December payrolls print this afternoon," said UBS,
which expects total payrolls to rise 160,000, in a note.
"Should (the numbers expected) materialise, the dollar will
have grounds to strengthen, and requirements for safe havens
like gold will wane."
"If the economic data continues to paint a positive picture
on the U.S. recovery, declining expectations for monetary easing
beyond QEII will act as a barrier to a higher gold price."
EURO UNDER PRESSURE
The euro came under pressure as worries over euro zone
sovereign risk caused peripheral bond yields to widen over
German benchmarks. []
While in the short term the impact of such concerns on the
euro is set to prove negative for gold, they are likely to
underpin the metal's appeal in the longer run, analysts said.
"Generally, an escalation of the (EU debt) crisis is
positive for gold, as it promotes demand for safe-haven assets,
but sometimes it can also weaken the euro, which in turn can
undermine gold," said HSBC in a note.
The head of the Bombay Bullion Association told Reuters on
Friday that gold imports to India, the world's largest consumer,
are likely to jump 64 percent to 500-550 tonnes in 2011, driven
by investment purchases. []
Gold-backed exchange-traded funds continued to see outflows,
with holdings of the largest, New York's SPDR Gold Trust <GLD>,
falling to a seven-month low on Thursday. []
In supply news, China, the world's biggest gold producer,
said its output the metal rose more than 9 percent in the first
eleven months of 2010 from the year before, and was expected to
top a record 340 tonnes in the full year. []
Silver <XAG=> dropped to $28.42 an ounce from $29.04, having
earlier touched its lowest since mid-December at $28.31 an
ounce.
Holdings in the world's largest silver-backed ETF, the
iShares Silver Trust <SLV>, fell to 10,892.87 tonnes on Jan 6
from 10,917.19 tonnes a day before. []
Platinum <XPT=> was at $1,722 an ounce against $1,729, while
palladium <XPD=> was at $742.65 against $758.50.
(Reporting by Jan Harvey; Editing by William Hardy)
