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Gold dips ahead of U.S. jobs data, but set for fourth week of gains

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(Reuters) - Gold prices dipped on Friday from the previous session’s 3-1/2 month high, ahead of U.S. non-farm payroll data, but remained on track for their fourth straight weekly gain.

Spot gold was down 0.3 percent at $1,318.40 an ounce at 0655 GMT. U.S. gold futures were down 0.2 percent at $1,319.10 an ounce.

Spot gold marked its highest since Sept. 15 at $1,325.86 on Thursday on a weaker dollar. It has risen over 1 percent so far this week.

Weighed down by the greenback’s weakness against the euro, the dollar index against a basket of six major currencies was poised for a loss of 0.2 percent this week, during which it probed a three-month low of 91.751.

The dollar index was last up 0.1 percent at 91.946.

“The support for the gold continues to emerge on dips,” said MKS PAMP trader Alex Thorndike, adding that the market would be in “wait and see mode” ahead of the U.S. jobs data.

U.S. private employers added 250,000 jobs in December, data from ADP Research Institute showed, the biggest monthly increase since March. Economists surveyed by Reuters had forecast a gain of 190,000 jobs.

Friday’s U.S. non-farm payrolls report is expected to show job gains of 190,000 for December, according to a Reuters survey.

Softer economic data weakens the case for a U.S. rate hike, boosting gold, which is highly exposed to interest rates and returns on other assets. Rising rates lift the opportunity cost of holding non-yielding bullion.

“There are some new long-positions after gold crossed $1,300 and they are trying to push prices up ... We can see people buying at corrections,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

“The dollar will be the key to gold’s moves going forward ... Markets are waiting for more clues on the pace of the interest rate hikes and how the tax reforms are going to help the U.S. economy.”

Among other precious metals, spot palladium was steady at $1,097.40 after hitting a record-high on Thursday at $1,105.70.

Palladium’s price jumped 56 percent last year on fears of a shortage fueled by Chinese car sales growth, tightening emissions controls and a swing away from diesel cars in Europe.

Spot silver was down 0.4 percent at $17.17, after touching its highest in over six weeks at $17.27 in the previous session.

Spot platinum rose 0.2 percent to $961.30 an ounce. It hit a 3 1/2-month peak at $965.40 on Thursday.

Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph Radford and Sunil Nair

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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