RTRS:PRECIOUS-Gold inches up on softer dollar; US jobs report in focus
* Dollar eases from seven-week high
* Seeing some position squaring ahead of jobs report -trader
* Coming Up: U.S. nonfarm payrolls; 1330 GMT
(Adds Chinese buying, updates prices)
By A. Ananthalakshmi
SINGAPORE, Jan 10 (Reuters) - Gold edged up on Friday as the
dollar came off seven-week highs, while investors looked ahead
to U.S. nonfarm payroll numbers for clues on the health of the
world's largest economy and what that means for the Federal
Reserve's monetary policy.
Markets fear a strong jobs report could prompt the Fed to
further reduce its bond-buying stimulus. The U.S. central bank
last month announced a $10 billion cut to its $85 billion in
monthly asset purchases.
Gold lost nearly 30 percent of its value in 2013, ending a
12-year bull run, as worries over a stimulus cut prompted
investors to shift money to equities.
"We are seeing some position-squaring ahead of the nonfarm
payrolls report, which really is the main driver for gold right
now," said one Hong Kong-based precious metals trader.
"The Fed has been looking a lot at employment data to take
decisions on the stimulus."
Other economic data earlier this week, including weekly
jobless claims, has already suggested that the U.S. economy is
gaining steam.
Spot gold rose 0.4 percent to $1,232.74 an ounce by
0736 GMT. The dollar eased from its seven-week high as investors
booked profits ahead of the U.S. jobs report.
A weaker greenback makes dollar-denominated gold less
expensive for holders of other currencies.
"If (nonfarm payrolls data) comes in higher than forecast,
as we suspect will be the case, we should see another spurt
higher in the dollar," INTL FCStone analyst Edward Meir said.
"Gold will then likely have to dodge another potential hit
that could come its way."
Several analysts have forecast another drop in gold prices
this year. Bank of America Merrill Lynch cut its 2014 average
price forecast to $1,150, citing an uncertain macro-economic
environment and lack of investment demand.
Barclays said it expects gold prices to average $1,205 and
test 2010 lows this year.
Gold-backed exchange-traded products saw outflows of $40
billion last year, according to data from asset manager
BlackRock.
In the physical markets, Chinese buying picked up on Friday.
Trading volumes for 99.99 percent purity gold contract
on the Shanghai Gold Exchange rose to over 16
tonnes from Thursday's 13 tonnes, while premiums climbed to $19
from $17.
Friday's volumes were the highest since Monday, when they
hit an eight-month high.
