PRECIOUS-Gold holds off 8-week lows as stock markets retreat – Reuters

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    * Gold pares gains after jobs, inflation data
    * U.S. stock markets open lower, supporting bullion
    * Expected U.S. rate hike keeps lid on prices

 (Updates prices; adds comment, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Peter Hobson
    NEW YORK/LONDON, May 11 Gold rose on Thursday as
U.S. and European stock markets retreated, though it pared gains
after data showing a tightening jobs market and accelerating
inflation briefly lifted the dollar and pulled U.S. bond yields
from earlier lows.
    The U.S. dollar index        later steadied.
    The metal is consolidating after sliding to its lowest in
eight weeks on Tuesday at $1,213.81 an ounce, analysts said.
    Spot gold        was up 0.4 percent at $1,223.6 by 1:52 p.m.
EDT (1752 GMT), following eight sessions in which prices have
been flat or fallen. Earlier it climbed as high as $1,227.70. 
    "It looks like gold is following stocks and the U.S. dollar,
but overall I would say it may have found a bottom, at least for
the time being," Afshin Nabavi, head of trading at MKS in
Switzerland said. "All we need is some good physical demand."
    Some physical buying has come through of late, he said, but
not as much as would have been expected given the price drop.
"Premiums have been rather poor," he said.
    U.S. gold futures         settled up 0.4 percent at
$1,224.20.
    "I think it's a market looking for the next catalyst.
Speculators are stuck waiting," said Rob Haworth, senior
investment strategist for U.S. Bank Wealth Management in
Seattle.
    "Higher real rates in the U.S., better economic growth in
Europe; those all end up being headwinds," he said.
    Analysts at ScotiaMocatta said the metal would struggle to
rise above technical resistance at its 100-day moving average,
now at $1,226. Support for the metal was at $1,195, they said. 
    Expected U.S. interest rate rises this year by the Federal
Reserve will put pressure on bullion, ABN Amro analyst Georgette
Boele said.
    Gold is highly sensitive to rising U.S. rates, which
increase the opportunity cost of holding non-yielding bullion,
while boosting the dollar, in which it is priced.
    Among other precious metals, silver        was up 0.8
percent at $16.27 an ounce and platinum        was 0.4 percent
higher at $912.
    Platinum producer Lonmin said on Thursday protesters
demanding jobs were disrupting output, damaging property and
intimidating employees around its Marikana operations in South
Africa. That lent little support to prices, however.
            
    Palladium        was up 0.4 percent at $801 an ounce. The
metal used in the automotive industry for emission-controlling
catalytic converters is around two-year highs, but Commerzbank
analyst Carsten Fritsch said recent car sales had disappointed. 
    "This points to lower demand for palladium if China and the
U.S. – the two leading demand markets – show continued
weakness," he said in a note.             

 (Additional reporting by Jan Harvey in London and Swati Verma
in Bengaluru; Editing by Susan Thomas and James Dalgleish)