* Rising appetite for risk takes wind out of gold's sails
* Coming up: U.S. non-farm payrolls data at 1230 GMT
* SPDR gold ETF holdings rise 21.3 T to record high
* Rand Refinery reports 50 rise in coin output in a week
(Updates prices)
By Jan Harvey
LONDON, June 4 (Reuters) - Gold fell below $1,200 an ounce
in Europe on Friday as traders took to the sidelines ahead of
hotly-anticipated U.S. non-farm payrolls data due later in the
day, with a strong reading expected to boost risk appetite.
The metal has benefited this year from nervousness in the
financial markets, which has knocked assets seen as higher risk,
such as stocks, industrial commodities and the euro.
Spot gold <XAU=> was at a session low of $1,197.55 an ounce
at 1032 GMT, against $1,206.05 late on Thursday. U.S. gold
futures for August delivery <GCQ0> fell $10.90 to $1,199.10.
"There are compelling reasons to believe that the jobs data
today will beat market expectations, and President Obama's
comments on this, a day ahead of this release, is forcing the
markets to believe that U.S. recovery is on a scheduled path,"
said Pradeep Unni, senior analyst at Richcomm Global Services.
On Wednesday President Barack Obama said he expected the
report to show strong jobs growth. []
"Ideally such data should boost the dollar, trigger
diversification to riskier assets and sink bullion, but with
debt concerns mounting in the euro zone, the degree of sell-off
in gold could get limited to $1,195-$1,184."
A Reuters poll forecast 513,000 jobs were created in May,
but some in the market were anticipating an even stronger figure
after upbeat data this week. []
The euro <EUR=> firmed against the dollar ahead of the
numbers, due at 1230 GMT. Trading activity in the foreign
exchange markets was down across the board in early trade, a
Reuters Insider Television report showed. []
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European stocks edged up ahead of the data, which investors
are hoping will soothe recent concerns about the pace of global
recovery. []
"The signs are this afternoon's U.S. job report will be
strong, as indicated by economic data as well as comments from
President Obama," Credit Agricole said in a note.
INVESTMENT STRONG
Gold investment continued, with coin sales strong in Europe
and the world's largest gold exchange-traded fund, SPDR Gold
Trust <GLD.P>, reporting a 21.3-tonne inflow on Thursday that
took its holdings to a record 1,289.839 tonnes. []
London's ETF Securities also reported inflows of 41,423
ounces of metal into its gold-backed exchange-traded products
that day, worth around $50 million.
"ETF investors' continued willingness to load up on gold
exposure provides a degree of comfort that a price floor is
near," said UBS analyst Edel Tully in a note.
Rand Refinery Ltd., the world's largest gold refiner, said
production of South Africa's Krugerrand gold coins soared by 50
percent in a week as the euro zone debt crisis drove up investor
demand. []
Among other commodities, oil prices turned higher in
European trade, while industrial metals prices also firmed.
[] []
Other precious metals eased, with platinum <XPT=> at $1,537
an ounce against $1,542.50, palladium <XPD=> at $441.50 versus
$448.50, and silver <XAG=> at $17.72 against $17.94.
"Pockets of pressure have been seen in both (platinum group)
metals this morning," said James Moore, an analyst at
TheBullionDesk.com.
"The failure to clear resistance around $1,573 in platinum
and $472 in palladium could prompt more technical-related
pressure in the short term."
(Reporting by Jan Harvey; Editing by Sue Thomas)
