PRECIOUS-Gold falls as strong U.S. jobs figures hint at recovery
* U.S. Feb non-farm payrolls beat expectations, boost dollar
* Gold underperforms platinum and palladium after upbeat data
* Investment outflows from SPDR Gold Trust resumes
(Updates throughout, adds analysts' comments)
LONDON, March 8 (Reuters) - Gold prices steadied on Friday, recovering losses made after a forecast-beating U.S. payrolls report, as resilience at $1,560 an ounce reassured investors of good underlying support.
Gold fell 1 percent in earlier trade, stocks markets rose and the dollar leapt after data showed U.S. employers added 236,000 jobs last month, well above an expected 160,000, pushing the unemployment rate to a four year-low.
Upbeat U.S. data has fuelled appetite for riskier assets such as stocks at gold's expense and raised speculation the Fed may consider reining in its ultra-loose monetary policy.
That has supported gold's recent rally, by pressuring long-term interest rates and stoking inflation concerns.
Spot gold was up 0.1 percent at $1,580.50 an ounce at 1515 GMT after earlier falling to a session low of $1,560.80 an ounce. U.S. gold futures GCv1 for April delivery were up $5.00 an ounce at $1,580.10, off a low of $1,560.40.
"The fact that the strongest economic data in a while failed to trigger a break below the recent low (has given) the market a bit of confidence, so we are seeing a classic Friday short covering exercise," Saxo Bank analyst Ole Hansen said.
Friday's jobs report showed the U.S. unemployment rate fell to 7.7 percent, the lowest since December 2008, from 7.9 percent in January.
But the pace of gains is still below the roughly 250,000 jobs per month that economists say is needed to significantly reduce unemployment, as the Federal Reserve hopes to achieve with its very accommodative policy.
"The (U.S.) numbers are starting to look a bit better and interest rates at some point will be starting to move up, which of course is negative for gold," said Jeremy East, global head of metals trading at Standard Chartered.
"Obviously, this is just one number. But if we see a trend forming it could be quite a different picture for the gold market."
"There's definitely a reallocation of cash going on at the moment," he said, pointing to recent heavy outflows from gold-backed exchange-traded funds (ETFs) and record highs hit by the Dow Jones Industrial Average.
MORE INVESTORS PULL OUT
Holdings of SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, fell 1.805 tonnes to a more than 16-month low of 1,243.05 tonnes on Thursday, resuming a decline after pausing for one session.
Investors pulled $5.6 billion from gold exchange-traded products (ETPs) last month after poor performance by the metal.
Hong Kong's net gold flow to mainland China in January fell to a three-month low of 27.336 tonnes despite a wave of buying in preparation for the Lunar New Year holiday, data from the Hong Kong Census and Statistics Department showed.
Among other precious metals, spot palladium was up 1.7 percent at $767.72 after hitting a three-week high of $769. It was on course for a weekly rise of 6.8 percent, its sharpest since late August.
Spot platinum was flat at $1,590.99, on course for a 1.3 percent weekly gain, its biggest in a month.
Deutsche Bank said it continued to favour the platinum group metals complex over other precious metals.
"While platinum may be vulnerable in an environment where euro area growth fails to materialise, we believe efforts to curb pollution in China will boost palladium demand over the medium term and sustain the bullish physical fundamentals in this market," the bank said in a note on Friday.
Spot silver rose 0.6 percent to $29.05, up 1.7 percent from a week earlier after a four-week losing streak.
Holdings in iShares Silver Trust, the world's top silver ETF, have increased 561.52 tonnes this year, exceeding the total inflow in 2012 at 479.17 tonnes, even though silver prices have dropped nearly 5 percent this year.
(Additional reporting by Rujun Shen in Singapore; Editing by Jan Harvey and Jason Neely)