By Jan Harvey LONDON (Reuters) - Gold firmed in Europe on Friday as the dollar weakened against the euro, boosting the precious metal's appeal as a currency hedge, while platinum surged 5 percent as investors sought bargains after recent price falls. Traders are eyeing U.S. non-farms payrolls data due out later in the session for clues as to the next direction of trade in precious metals. Spot gold was quoted at $741.05/743.05 at 1038 GMT against $731.55 in late New York trade on Thursday. Platinum was at $856/876 an ounce against $823, having earlier touched a high of $865.50. Its sister metal palladium tracked it higher to a peak of $230 an ounce, before easing to $224/234 against $214.50. A supply outage in major producer South Africa, where Anglo Platinum said a smelter shutdown would cut output by up to 200,000 ounces. A weaker dollar also helped platinum to rise, analysts said. "People are looking at the charts and realising both platinum and palladium have broken out of the downtrend in the charts, and that is bringing in more funds on the long side," says Mitsubishi precious metals strategist Tom Kendall. "There is a reasonable chance that we have seen the lows in platinum, and probably in palladium also," he added. Interest in platinum has been renewed after the metal fell more than 50 percent from July onwards, with investors seeking to buy into the metal at lower prices, traders said. Both platinum and palladium have been pressured sharply lower by fears demand for the metals from automakers, who account for around half of annual consumption, will decline in the face of the economic slowdown. Beijing Automotive Industry Holding, Chrysler LLC's partner in China, became the latest carmaker to cut its sales forecasts for this year on Friday, to above 800,000 units from 1 million. Meanwhile gold is also being helped by the weaker dollar and by fresh fears over the outlook for the global economy, which is boosting the precious metal's appeal as a haven. A series of interest rate cuts in Europe on Thursday provided a temporary fillip to stock markets, but the gains were not sustained. "While this adds to the enormous monetary stimulus already in motion globally, markets remain unconvinced that it is enough to save the world from a major economic downturn," noted Standard Bank analyst Walter de Wet. Nontheless, a low interest rate environment should boost the appeal of gold, as it will cut the opportunity cost of investing in non-interest bearing assets such as the precious metals. Traders are now turning their attention to the release of non-farms payrolls data at 1330 GMT, which is likely to have a significant impact on the currency markets. The employment data is likely to show that job cuts hit a five-year high of 200,000 in October and that unemployment jumped to 6.3 percent from 6.1 percent a month before, according to a Reuters poll. The dollar weakened against the euro ahead of the data as investors sold the U.S. currency in favour of higher-yielding assets, lending support to the precious metals. Oil prices also rose, climbing more than $1 a barrel as the weaker dollar offset fears over the demand outlook. Rising crude prices are typically positive for gold, which is often bought as a hedge against oil-led inflation. Among other precious metals, spot silver rose to $10.14/10.24 from $9.96 an ounce late in New York on Thursday. "Silver production growth may slow as producers halt expansion," said Fairfax analyst John Meyer in a note.

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