Gold down on dollar; eyes on ECB news conference, U.S. data

By Clara Denina

LONDON (Reuters) - Gold fell on Thursday, under pressure from a steady dollar and firmer share markets as investors awaited a European Central Bank news conference and a U.S. jobs report that could provide clues on the timing of a Federal Reserve rate rise.

The ECB left interest rates unchanged at record lows as expected. Markets now turn their attention to President Mario Draghi's comments at 1230 GMT and the ECB staff's new inflation and GDP growth forecasts.

As a traditional hedge against inflation, gold could suffer from a downward revision of oil-led inflation.

The main focus, however, remains Friday's U.S. jobs data, which should give a clearer picture about the strength of the world's biggest economy.

"Only amazingly good U.S. data would bring the prospect of the rate hike back to September from December," Citi strategist David Wilson said. "That could put immediate further pressure on the gold price."

Spot gold was down 0.5 percent at $1,127.81 an ounce by 1200 GMT, while U.S. gold for December delivery slipped $6.00 to $1,127.50.

The dollar steadied against a basket of leading currencies, while global investors stepped back into riskier equities, hurting bullion. [MKTS/GLOB]

The technical picture for gold looked bearish with near-term support at $1,117, ScotiaMocatta analysts said.

"We are bearish gold so long as it trades below the recent high of $1,170."

U.S. private payrolls data on Wednesday suggested labour market momentum likely remained strong enough for the Fed to consider an interest rate rise this year. Non-farm payrolls are due at 1230 GMT on Friday and will be preceded by weekly jobless claims data on Thursday.

"Gold is awaiting the payroll data for indications of Fed intentions at the September FOMC meeting. So the market may move sideways until the numbers are released," said HSBC in a note, referring to the Fed's Federal Open Market Committee.

A strong jobs report could prompt the Fed to increase rates sooner than later.

Bullion traders remain wary of taking up new positions until they receive more clarity on whether the Fed will raise rates at its next meeting on Sept. 16-17, analysts said.

Higher interest rates would increase the opportunity cost of holding non-yielding bullion.

Also weighing on bullion was the absence of Chinese buyers. Markets in China, a major gold consumer, are closed on Thursday and Friday for public holidays.

Tepid Chinese demand over the holidays will keep gold prices capped, along with the uncertainty over U.S. rates, HSBC said.

Other precious metals were also under pressure, with silver down 0.3 percent to $14.66 an ounce and platinum falling about 0.6 percent to $1,006.46. Palladium bucked the downtrend, up 0.3 percent at $584.50.

(Additional reporting by A. Ananthalakshmi in Singapore; Editing by David Evans)