PRECIOUS-Gold edges up, China demand offsets U.S. jobs data
* Gold climbs off Friday lows, propped up by China buying
* Bullion fell 2 pct in previous session after U.S. jobs data
(Adds quotes, details; updates prices) SINGAPORE, June 10 (Reuters) - Gold inched up on Monday after dropping 2 percent in the previous session, as buying in China offset fears the Federal Reserve could soon begin to scale back its monetary stimulus on the strength of recent jobs data. The United States added more jobs in May than the month before, curbing hopes of prolonged stimulus and weighing on gold's appeal as a hedge against inflation. "China has been the only supporting factor for gold in Asia trading sessions recently," said Victor Thianpiriya, commodities analyst at Australia and New Zealand Banking Group. Demand for gold in China, the second-biggest bullion buyer after India, has grown since prices touched a two-year low around $1,320 an ounce in April, with tight supply pushing premiums to record highs. Spot gold had inched up 0.2 percent to $1,386.46 an ounce by 0401 GMT after its biggest one-day drop in over three weeks on Friday, when funds dumped bullion on the concerns over the outlook for the Fed's bond-buying programme. Data from China over the weekend suggested risks are rising that the country's economic growth will slide further in the second quarter after unexpected weakness in May trade and domestic activity. Any signs of weakness in the Chinese economy could prompt investors to switch to gold holdings and away from stock markets.
TAPERING? Philadelphia Fed President Charles Plosser said on Friday the jobs report showed that government spending cuts have so far not been as damaging as some feared and that the central bank should reduce its bond buying "now". Plosser, however, is in the minority of the Fed's 19 policy-makers. The majority appear to still support buying $85 billion in Treasury and mortgage bonds per month to spur investment, hiring and overall economic growth. "Job gains need to be sustained before the Fed starts to consider bringing forward the tapering," ANZ's Thianpiriya said, adding that most market participants expect the winding down to begin in the fourth quarter of this year or early next year. A better-performing stock market has attracted investors this year, sapping some appetite for gold. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.06 percent to 1,007.14 tonnes on Friday -- their lowest in four years. But hedge funds and money managers increased their bullish bets in both gold and silver futures and options for a second consecutive week, a report by the Commodity Futures Trading Commission showed on Friday.
Precious metals prices 0401 GMT
Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1386.46 2.57 +0.19 -17.20 Spot Silver 21.79 0.15 +0.69 -28.04 Spot Platinum 1497.25 -1.25 -0.08 -2.46 Spot Palladium 752.97 -2.53 -0.33 8.81 COMEX GOLD AUG3 1386.10 3.10 +0.22 -17.29 9853 COMEX SILVER JUL3 0.22 0.00 +0.06 -99.28 4341 Euro/Dollar 1.3201 Dollar/Yen 98.15
COMEX gold and silver contracts show the most active months
(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)