By Arpan Mukherjee Of DOW JONES NEWSWIRES WELLINGTON (Dow Jones)--Gold was a tad weaker, moving in and out of positive territory in Asian session with small profit taking weighing on prices while the bleak economic outlook following disappointing U.S. payrolls data Friday kept its downside limited. The yellow metal, which is considered a safer bet during economic uncertainty, rose by a sharp 3.2% Friday after staying range-bound during most of last week. At 0539 GMT Monday, spot gold was at $1,879.80 a troy ounce, down $4.40 from its previous close, after prices failed to test key psychological resistance at $1,900/oz. "I can't see U.S data turning too optimistic before the end of the year, so gold will still be the choice for investors," said a Beijing-based analyst, who, like many others, expects the yellow metal to touch $2,000/oz before the end of the year. The U.S. non farm payrolls data for August showed 17,000 jobs added by the private sector, well below a median estimate of 80,000 made by economists. The weaker-than-expected data disappointed investors as concerns deepened over the prospect for the world's biggest economy. Friday's suspension of talks between the Greek government and representatives of the International Monetary Fund, European Central Bank and European Commission over new bailout funds also made investors jittery. Though traders and investors remain confident of gold's bullish medium-to-long term outlook, they remain wary of the metal's sharp movements in the short term. Gold rose rapidly to touch a record $1,912.29/oz on Aug. 23 before falling more than $200 in the next 48 hours after U.S. exchange operator CME Group hiked trading margins on gold futures. Gold is no longer a "one-way bet," said Credit Agricole analyst Robin Bhar in a report. "Ongoing price volatility should serve to illustrate to investors that any notion of [gold] being regarded as a risk-free asset is misplaced," he said. Darren Heathcote, head of trading at Investec Bank agreed with Bhar's caution on gold. "When something moves as quickly as gold did, there is always the risk of correction," Heathcote said, adding that there could be "short periods of high volatility, where we could see sharp corrections if we get some positive news flow." Silver, which has been moving in line with gold, is facing resistance at $45/oz-$46/oz, the Beijing-based analyst said, adding the metal is likely to see more volatility in the near-term as it looks overbought at current levels. She said silver's climb during August was due to physical buying in Asia, and these buyers are likely to lock in profits if prices rise further. At 0539 GMT, silver was 18 cents lower at $43.07/oz, platinum was down $8 at $1,870/oz while palladium was $3 higher at $779/oz. Citigroup said it maintained its preference for palladium over platinum as it expects a widening deficit in the palladium market. In contrast, the house expects the platinum market to have a surplus of 400,000-600,000 ounce over the next 3-5 years. -By Arpan Mukherjee, Dow Jones Newswires; 64-4-471-5990; arpan.mukherjee@dowjones.com

Source