* Gold recovers from lows, tracking commodity complex
* Bullion pressured by dollar rise on upbeat US jobs data
* Silver, platinum down on gold's wake
* Coming up: U.S. Dec. nonfarm payrolls data on Friday
(Recasts, adds comments, updates market activity, changes
byline/dateline, previously LONDON)
By Frank Tang
NEW YORK, Jan 5 (Reuters) - Gold fell but off its earlier
lows on Wednesday as the dollar surged after a strong U.S.
private-sector employment report, which reinforced an improving
economic outlook and dented safe-haven buying.
U.S. data showed a surprise jump in U.S. private-sector
jobs last month.[] This boosted the dollar,
[] making dollar-denominated commodities more expensive.
"A lot of gold's weakness has to do with the fact that
investors believe economic performance is going to pick-up as
we start 2011," said James Dailey, portfolio manager of the
Team Asset Strategy Fund <TEAMX.O>.
"Gold's drop was a continuation of the general de-risking
trade, as the strength on the upside was so impressive that at
some point that type of a straight-up move inevitably ends," he
said.
Gold had gained nearly 30 percent in 2010 to a record
$1,430.95 on Dec. 7, but the market sold off at the start of
the year after a thin-volume holiday rally.
Spot gold <XAU=> fell 0.3 percent to $1,376.20 an ounce at
12:27 p.m. EST (1727 GMT). Earlier, it fell more than 1 percent
to session lows at $1,363.80, a day after it lost 2.5 percent
to its biggest one-day loss since early November in a
profit-taking commodities rout.
U.S. February gold futures <GCG1> fell $1.40 to $1,377.40.
But gold still looks likely to be firmly underpinned by
factors such as concerns over sovereign risk, threats to U.S.
economic stability and the prospect of rising inflation in the
fast-growing developing world, analysts said.
"I don't think this marks a turnaround from what has been
and continues to be bullish sentiment towards gold and hard
assets in general," said Credit Agricole analyst Robin Bhar.
"The ADP numbers and the recent raft of economic numbers
are good to see, but it's not a one-way bet that this market is
in a solid economic uptrend," he said. "There are still a lot
of banana skins along the way."
Commodities rebounded as the encouraging U.S. data lifted
oil and industrial metal markets after initially slipping
almost across the board as the dollar rose. [] ][]
HOPEFUL FOR PAYROLLS
The ADP report for December comes two days ahead of the key
December nonfarm payrolls report, which is forecast to show a
rise in jobs. []
Reflecting waning investor appetite for gold, holdings of
the world's largest gold exchange traded fund, the SPDR Gold
Trust <GLD>, fell to a seven-month low, reversing most of the
inflows that followed the euro zone debt crisis. []
"The big risk for gold, from my perspective, (is that) some
of the major hedge funds, which are long in physical gold or
ETFs, start to take profits," said Peter Fertig, a consultant
for Quantitative Commodity Research.
Silver <XAG=> fell for a third consecutive session, under
pressure from the strength in the dollar and a decline in other
growth-linked assets such as base metals.
Silver, which can mimic gold's performance when investors
feel nervous about the broader financial markets, is also an
industrial commodity that can take its cue from higher-risk
assets such as stocks and base metals.
Adding to the pressure on silver was the third daily rise
in the gold/silver price ratio, which measures the number of
ounces of silver needed to buy one ounce of gold.
The ratio fell by a third to multi-year lows in 2010 as
silver outperformed gold with an 84 percent price rise. Spot
silver <XAG=> dropped 1.6 percent to $29.31 an ounce.
Platinum group metals was weaker in tandem with gold and
silver despite stronger December U.S. auto sales data.
Spot platinum <XPT=> fell 1.3 percent to $1,729.74, while
palladium <XPD=> lost 0.6 percent to $770.47.
Prices at 12:34 p.m. EST (1734 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCG1> 1378.00 -0.80 -0.1% -3.1%
US silver <SIH1> 29.350 -0.138 -0.5% -5.1%
US platinum <PLJ1> 1737.60 -9.80 -0.6% -2.3%
US palladium <PAH1> 773.55 4.50 0.6% -3.7%
Gold <XAU=> 1377.60 -2.13 -0.2% -2.9%
Silver <XAG=> 29.32 -0.45 -1.5% -5.0%
Platinum <XPT=> 1730.49 -22.75 -1.3% -2.1%
Palladium <XPD=> 770.72 -4.25 -0.5% -3.6%
Gold Fix <XAUFIX=> 1368.00 -14.75 -1.1% -3.0%
Silver Fix <XAGFIX=> 29.21 -146.00 -4.8% -4.6%
Platinum Fix <XPTFIX=> 1722.00 13.00 0.7% -0.5%
Palladium Fix <XPDFIX=> 754.00 10.00 1.3% -4.7%
(Additional reporting by Amanda Cooper in London; Editing by
Marguerita Choy)
