* U.S. March non-farm payrolls data beat expectations
* Gold pressured by expectations monetary policy may tighten
* SPDR gold ETF sees biggest ever quarterly outflow in Q1
* U.S. Mint reports highest ever quarterly silver coin sales
(Updates prices, adds comment)
By Jan Harvey
LONDON, April 1 (Reuters) - Gold fell on Friday after data
showed the U.S. economy added more jobs than expected in March,
lifting the dollar and supporting expectations U.S. authorities
may move towards tighter monetary policy.
Spot gold <XAU=> slipped 1 percent to a session low at
$1,419.60 an ounce and was bid at $1,421.35 an ounce at 1302
GMT, against $1,436.48 late in New York on Thursday. U.S. gold
futures for April delivery <GCJ1> fell $17.10 to $1,421.80.
U.S. employment recorded a second straight month of gains
in March, rising by 216,000 jobs, and the jobless rate fell to a
two-year low of 8.8 percent. []
"Nonfarm payrolls data was better than expected, further
evidence of the economic recovery in the United States," said
BNP Paribas analyst Anne-Laure Tremblay.
"This may bring further fuel for the Federal Reserve to
withdraw exceptional measures. The resulting decline in global
liquidity would likely have a negative impact on gold."
The dollar rose to a three-month high against the yen and
extended gains versus the euro after the figures, which analysts
say provided new evidence the U.S. economy is recovering. []
Analysts are weighing up the chances of the Fed reducing its
quantitative easing measures, as a precursor to an eventual rise
in interest rates. Gold tends to suffer when rates climb, as the
opportunity cost of holding non-yielding assets increases.
Gold prices hit a record $1,447.40 an ounce last month as
unrest across the Middle East and North Africa, the reemergence
of euro zone sovereign debt issues and a devastating earthquake
in Japan prompted buying of the metal as a haven from risk.
But while they recorded a tenth consecutive quarter of gains
in the first three months of 2011, it was the smallest such rise
since the financial crisis gripped the markets in late 2008 as
investors worried about the prospect of rising rates.
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Graphic showing gold's quarterly performance in recent
years: http://r.reuters.com/cew78r
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RATE HIKES EYED
Nick Moore, head of commodity strategy at RBS, said gold
prices were likely to suffer further from a positive payrolls
report after coming under pressure from expectations that the
European Central Bank will hike interest rates this month.
"All we have seen is the positive side of the gold story,
and what we have to see now is how gold fares in an environment
of rising interest rates, where holding a non-yielding asset
goes against you," he said.
Concerns over the financial health of smaller euro zone
economies such as Portugal and Ireland are still weighing on the
euro, meanwhile.
Among other commodities, oil prices rose, with U.S. crude
edging above $107 a barrel and Brent crude approaching $118 as
unrest continued across the Middle East and North Africa. []
In Libya, rebels sought to retake the oil town of Brega and
regain momentum against better equipped forces loyal to Muammar
Gaddafi. More unrest was reported in Bahrain. []
Investment products such as gold-backed exchange-traded
funds saw less interest, with the largest, New York's SPDR Gold
Trust <GLD>, reporting its biggest ever quarterly outflow in the
first three months of 2011. []
But elsewhere the U.S. Mint said it sold more gold American
Eagles in the three months to end March than in any quarter
since the end of 2009, and reported its highest ever quarterly
sales of silver American Eagle coins. []
Silver <XAG=> was bid at $37.22 an ounce against $37.60.
Meanwhile platinum <XPT=> was at $1,768.49 an ounce against
$1,766.30, while palladium <XPD=> was at $768.72 versus $758.35.
(Reporting by Jan Harvey; editing by Keiron Henderson)
