PRECIOUS-Gold heads for 2nd week of losses; U.S. jobs report in focus
* Gold to drop more after moderate rebound-technicals
* Coming up: U.S. Employment report For August; 1230 GMT
(Updates prices, adds dealer's quotes) SINGAPORE, Sept 6 (Reuters) - Gold held near a 2-week low on Friday and was headed for its second week of losses on growing expectations the U.S. Federal Reserve will wind down its commodities-friendly bond-buying programme. The Fed's stimulus has been a key driver in gold's rally in recent years as it burnished its appeal against inflation. Bullion's 18 percent drop so far this year has been blamed on worries the central bank would soon taper the asset purchases. Gold rose $4.10 an ounce to $1,371.09 by 0314 GMT on short-covering and purchases by the physical sector. It was not far off Thursday's low of $1,364.91, its weakest since August 22, and was on course to lose 1.7 percent for the week. "There's a small amount of buying because prices have been trading at the lower end these few days," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "People are covering their shorts before the non-farm payroll data comes in. Tonight's data may show the U.S. economy continuing to improve, then maybe QE will be ended or reduced a little bit." U.S. gold was at $1,371.60 an ounce, down $1.40. Investors are waiting for the release of Friday's U.S. nonfarm payrolls data for August, which will help guide the Fed's decision on when to slow its bond purchases, widely known as quantitative easing, or QE. Economists in a Reuters survey forecast 180,000 jobs were created in August compared with 162,0000 jobs created in July.
"The bigger risk for gold would be a softer-than-expected figure around 160,000 which is likely to trigger a relief rally," said ANZ in a report. "Near-term downside support rests around $1,352-53 an ounce, coinciding with the mid-August lows and the 50 percent retracement from 7 August to 28 August. Topside resistance is at $1,372 an ounce, where the market is nudging now, and then the $1,390 an ounce area," ANZ added. Gold rallied to around $1,433, its highest in more than three months, in late August on safe-having buying as the United States and its allies looked close to launching military strikes on Syria. But the metal has shrugged off geopolitical tensions and turned its focus on the state of the U.S. economy. The dollar held firm near a seven-week high against a basket of currencies on Friday after solid U.S. economic data sharpened expectations the upcoming crucial jobs report might make a reduction in the Fed's stimulus a done deal.
Precious metals prices 0314 GMT
Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1371.09 4.10 +0.30 -18.12 Spot Silver 23.24 0.09 +0.39 -23.25 Spot Platinum 1480.99 1.99 +0.13 -3.52 Spot Palladium 685.75 1.25 +0.18 -0.90 COMEX GOLD DEC3 1371.60 -1.40 -0.10 -18.15 8891 COMEX SILVER DEC3 23.29 0.03 +0.13 -23.17 3277 Euro/Dollar 1.3137 Dollar/Yen 99.74
COMEX gold and silver contracts show the most active months
(Editing by Muralikumar Anantharaman)