* Gold supported by dollar ahead of U.S. jobs data
* Non-farm payrolls seen falling by 520,000 in May
* Platinum, palladium benefit from fund buying
(Updates throughout, changes dateline from TOKYO)
By Jan Harvey
LONDON, June 5 (Reuters) - Gold trod water in Europe on
Friday, supported near $980 an ounce by the weaker dollar and
firmer oil prices, with traders awaiting key U.S. jobs data due
later in the session.
Spot gold <XAU=> was bid at $978.80 an ounce at 0918 GMT,
against $979.10 an ounce late in New York on Thursday.
The May non-farm payrolls report is being closely watched
for its impact on currencies and expectations for a wider
economic recovery, both of which feed strongly into the gold
market, analysts said.
"The market is consolidating ahead of the figures," VTB
Capital analyst Andrey Kryuchenkov said. "The weak dollar still
supports gold." He said while rising oil prices lifted gold on
Thursday, the dollar is likely to remain the key price driver.
The dollar edged lower against a basket of major currencies
on Friday, as investors shifted into higher-yielding currencies
amid hopes the recession may be easing. []
Weakness in the dollar supports gold because investors turn
to the metal as a currency hedge. It also makes dollar-priced
commodities cheaper for holders of other currencies.
Oil, widely seen as a good indicator of investors' interest
in commodities as an asset class, firmed on Friday to just below
$70 a barrel, near the seven-month high it hit on Thursday.
Firmer crude prices often benefit gold, which is sometimes
bought as a hedge against oil-led inflation. If prices post
further gains, they could help push gold higher, as long as the
dollar is also supportive, traders said.
Commodities across the board are likely to be affected by
the U.S. payrolls data's impact on the wider markets. ADP jobs
data on Wednesday showed employers cut more than half a million
jobs in May, suggesting the economy was still struggling.
"Gold could draw additional support on the confirmation of
weakness on the U.S. jobs market," said Pradeep Unni, senior
analyst at Richcomm Global Services in Dubai. "At the moment,
the trend still seems to be biased towards higher highs."
INFLOWS
Investment demand was relatively quiet, with holdings of the
SPDR Gold Trust, the largest gold exchange-traded fund, steady
on Thursday. London's ETF Securities saw an inflow of nearly
28,000 ounces into its three gold ETFs. []
Buying in India, the leading global bullion consumer, was
subdued as customers anticipated lower prices. []
Among other precious metals, silver <XAG=> was at $15.72 an
ounce against $15.85. Palladium rose, extending the previous
session's fund-driven gains, while platinum held steady.
Platinum <XPT=> was quoted at $1,290 an ounce against
$1,290.50, while palladium <XPD=> was at $263 against $252.50.
The metals have been lifted by gains in other industrial
commodities such as oil and copper, which are benefiting from
hopes the economy may be bottoming out. However, the gains look
to be investment led rather than consumer led, traders said.
"Platinum seems to be getting a lift from the ETF markets,"
Commerzbank trader Rory McVeigh said. "Sponge is still at a
discount....indicating that the industrials aren't taking metal
on yet."
Platinum sponge is usually used by industrial consumers,
while ingot is used by buyers such as jewellers and investors.
(Editing by Sue Thomas)
