Gold slipped 1 percent on Monday as oil dropped and the euro extended losses against the dollar, while physical demand was seen softening. "We suspect that further dollar strength might put gold under pressure over the coming week," said analyst David Thurtell at Citi. Investors awaited the European Central Bank's policy meeting on Thursday, which could set the direction of the dollar amid expectations of more rate cuts keeping the euro on the defensive. [ID:nL9311168] "The euro is likely to fall as the European Central Bank cuts rates to stem the decline in the Euro zone economy," Citi's Thurtell said. Gold was trading at $844.60 an ounce by 1025 GMT, down 1 percent from $853.60 in New York late on Friday. Thurtell said gold was supported at around $835. But physical demand was seen softening after holding firm in the normally very strong fourth quarter. "It tends to tail out in the first quarter ... the market over the next few weeks will probably focus on weaker demand," said analyst Michael Widmer at BNP Paribas. Gold has bounced more than 20 percent since tumbling to a 13-month low around $680 in late October. Bullion struck a record $1,030.80 last March. Oil CLc1 dropped below $39 a barrel on persistent worries about falling demand following Friday's dismal U.S. payrolls report, which showed 1.1 million jobs lost since November and the highest unemployment rate since 1993. [O/R]. "Gold came off in line with the stronger dollar and the weaker oil price," a trader said, adding trading was calm on Monday. The euro fell to $1.3381 amid talk of an aggressive cut in eurozone interest rates later this week, with speculation rife the central bank will cut its key lending rate by 50 basis points to 2 percent. [USD/] On COMEX, speculative gold players boosted their net long positions to 133,604 at Jan. 6, up from 125,961 net longs at Dec. 30, Commodity Futures Trading Commission data showed. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD, said it held 787.60 tonnes of gold as of Jan. 9, down 0.28 tonnes from a record 787.88 tonnes on Jan. 7. [GOL/SPDR] Holdings in the trust, which issues securities backed by physical stocks of gold, began climbing again in December after poor prospects for the global economy ignited demand for bullion as a safe-haven asset. XAUEXT-NYS-TT. Platinum was trading at $989 an ounce, down from $992.50 in New York on Friday. Silver was at $11.09, from $11.24, and palladium was unchanged at $191. New York gold futures GCZ9 fell $2.8 an ounce to $859.

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