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PRECIOUS-Gold price slips after mixed U.S. jobs data

Published 06/02/2016, 01:52 am
Updated 06/02/2016, 02:40 am
© Reuters.  PRECIOUS-Gold price slips after mixed U.S. jobs data
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(Adds comment, reaction to US jobs report, updates prices)

* Gold hits 3-month high then pulls back after jobs report

* Receding U.S. rate rise view has spurred gold bulls

* Silver on course for best week since May 2015

By Susan Fenton

LONDON, Feb 5 (Reuters) - The price of gold slipped after a mixed U.S. jobs report on Friday, but was still on track for its biggest weekly gain in a month on doubts about whether the Federal Reserve can keep raising interest rates.

U.S. non-farm payrolls increased by 151,000 in January, well below a Reuters poll forecast for a rise of 190,000 and down from 292,000 in December, but hourly wages surged and the U.S. unemployment rate fell to an eight-year low, suggesting the labour market recovery remains on track.

Spot gold XAU= initially rose after the jobs report to $1,161.31 an ounce, its highest since Oct. 29, but by 1401 GMT it was down 0.5 percent at $1,149.86 an ounce.

The price has advanced nearly 4 percent so far this week as investors turned doubtful that the U.S. will raise rates this year after a top Fed official, William Dudley, said there was a need to consider the weakening global outlook in framing U.S. monetary policy. analysts said some traders may have trimmed positions in gold slightly after the jobs report as the strength of U.S. wage growth and the drop in the unemployment rate may have revived the prospect of some hikes this year.

As a non-interest bearing asset, dollar-denominated gold becomes less attractive if U.S. interest rates rise.

"Gold is still a lot above where it was at the beginning of the week and it still looks less likely that the U.S. will go ahead with a rate hike in the next few months so that is positive for gold," said Simona Gambarini, an analyst at Capital Economics.

A shaky global economy has lifted buying interest in gold, making it among the best performing assets since the start of 2016 with a gain of more than 9 percent.

Other precious metals rose on the back of gold's rally, with silver and platinum also at multi-month highs. Silver is on track for its best week since May last year.

U.S. gold for April delivery GCcv1 was down 0.6 percent at $1,150.20 an ounce.

"We see no compelling reason for more than a normal retracement before bullion resumes an upward move," HSBC analyst James Steel said in a note, adding gold was underpinned by risk-off sentiment and a shift in global monetary policy.

Holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose to 22.3 million ounces on Thursday, the highest since late October. GOL/ETF

Spot silver XAG= was down 0.8 percent at $14.75 an ounce, but not far from Thursday's three-month high of $14.91 and has gained more than 3 percent this week.

Platinum XPT= was down 1.2 percent at $896.96 an ounce, while palladium XPD= was down 0.6 percent at $508.73, after earlier hitting a one-month high at $518.14.

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