* U.S. payrolls data comes in stronger than expected
* Gold slides from peak of $1,112/oz, highest since Nov
* GRAPHIC: Commodities 2016-http://link.reuters.com/reb25t
* Coming up: U.S. Commitments of Traders report at 2030 GMT
(Updates prices; adds comment, second byline, NEW YORK
dateline)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, Jan 8 (Reuters) - Gold fell further from an
earlier nine-week high but was still on track for its strongest
week since August on Friday as stronger-than-expected U.S.
payrolls data boosted the dollar and stock markets, shoring up a
recovery in equities.
The Labor Department said U.S. job growth surged in
December, and revised employment for the prior two months
sharply higher, suggesting that a recent manufacturing-led
slowdown in economic growth would be temporary.
That surprisingly strong payrolls report initially lifted
stocks but they later lost ground. The dollar rose versus the
euro. MKTS/GLOB
Spot gold XAU= initially rose to the highest since early
November in overnight trade at $1,112 an ounce. It was down 0.9
percent at $1,098.84 an ounce at 2:15 p.m. EST (1915 GMT),
breaking a four-day winning streak. U.S. gold futures GCv1 for
February delivery settled down 0.9 percent at $1,097.90.
"(These are) very strong numbers, good for the U.S. dollar,"
said Georgette Boele, analyst at ABN Amro. "The U.S. dollar is
the most important negative driver for gold prices, so this will
add pressure."
A strong report could be seen as prompting the Federal
Reserve to lift interest rates at a faster pace. Rising rates
typically weigh on gold, as they lift the opportunity cost of
holding non-yielding assets, while boosting the dollar.
"The week provided a good gold rally as stocks were slammed
but today (a) 5 percent jobs report added some bears to gold as
(the) Fed seems on path with future rate hikes on this news,"
said George Gero, precious metals strategist for RBC Capital
Markets in New York.
Jitters over the Chinese economy had spooked global stock
markets earlier this week, sending investors sprinting to
safe-haven assets, and pushing gold sharply higher.
"Although we expect further Fed tightening and dollar
strength to prove headwinds for gold over the coming year, the
price should be supported by safe-haven demand, a pickup in U.S.
inflation and strong buying from emerging economies," said
Capital Economics in a note.
Investment appetite for bullion showed signs of picking up
this week. Holdings of the world's largest gold-backed
exchange-traded fund, New York-listed SPDR Gold Shares GLD ,
rose 4.2 tonnes on Thursday, data from the fund showed.
Silver XAG= was down 2.6 percent at $13.93 an ounce, while
platinum XPT= was up 0.04 percent at $874.15 an ounce.
Palladium XPD= was down 0.2 percent at $491.50 an ounce.
Palladium fell below $500 for the first time since September
2010 on Thursday, reaching a low of $481.67. It is set to end
the week down 12.5 percent.