Gold steady; trade thin as US jobs data eyed

Spot gold held steady on Friday, supported by Moody's warning on US credit rating and a subsequent weaker dollar, while investors moved to the sidelines before the release of the closely watched US non-farm payrolls data.

Moody's threatened to cut the top-notch credit rating of the United States if the White House and Congress do not make progress by mid-July in talks to raise the US debt limit, sending the dollar index to its lowest in a month.

The greenback has been battered in recent weeks by a raft of sluggish U.S. economic data that has fueled fears that recovery in the world's biggest economy is losing steam.

Economists revised down their forecast on the May non-farm payrolls data, after a report on Wednesday showed a sharp slowdown in private job growth last month.

"If the payrolls data turns out worse than expected, it may help gold advance towards the record high in the next few days," said Hou Xinqiang, an analyst at Jinrui Futures, who said gold is still on an upward trend after a correction last month knocked prices below USD 1,500.

Spot gold was nearly flat at USD 1,532.39 by 0315 GMT, after touching a one-week low of USD 1,519.60 in the previous session. It was headed for a minor 0.2 percent fall from a week earlier.

U.S. gold edged up USD 1 to USD 1,533.70.

Technical analysis suggested gold might face some downside risk in the short term, with a bearish target at USD 1,511, said Reuters market analyst Wang Tao.

"A lot of people have reduced risk ahead of the payrolls data, so there is not much action in the market," said a Singapore-based trader. "But gold is still looking firm -- the dip overnight was well bought into."

Investors continued watching the ongoing Greek debt crisis. Greece agreed with its EU and IMF lenders to impose yet deeper austerity and speed up state selloffs in exchange for fresh funds to avert a debt default.

Spot silver inched down 0.3% to USd 36.06, on course for a nearly 5% weekly decline, although it was still up 17% year to date, leading the precious metals complex.

U.S. silver fell 0.4% to USD 36.08.

The recent losses in silver have helped the gold-silver ratio, used to measure how many ounces of silver is needed to buy an ounce of gold, rise to a nearly two-week high above 42.

Spot platinum was barely changed at USD 1,808.74, headed for a third week of gains at one percent. Spot palladium declined 0.4% to USD 764.22, also on its way to a one-percent weekly rise.