* 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)
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 a tighter monetary policy.
Spot gold <XAU=> slipped 1.7 percent to a session low at $1,412.55 an ounce and was bid at
$1,419.50 an ounce at 1409 GMT, against $1,436.48 late in New York on Thursday. U.S. gold
futures for April delivery <GCJ1> fell $17.80 to $1,421.10.
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 said provided new evidence the U.S. economy is recovering.
[]
It pared some gains after another report later showed the U.S. manufacturing sector grew
at a marginally slower pace in March than in the previous month, but remained well supported.
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 an earthquake and
tsunami in Japan prompted buying of the metal as a haven from risk.
Gold recorded a 10th consecutive quarter of gains in the first three months of 2011, but
it was the smallest rise since the financial crisis gripped markets in late 2008.
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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 on unrest 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. []
Elsewhere the U.S. Mint said it sold more gold American Eagles in the first quarter 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 $37.27 an ounce against $37.60. Platinum <XPT=> was at $1,761.49
an ounce against $1,766.30, while palladium <XPD=> was at $765.72 versus $758.35.
(Reporting by Jan Harvey; editing by Jason Neely)
