* Gold has risen 17 pct this year, not far below 1-year peak
* Market eyeing Friday's U.S. nonfarm payrolls
* Coming up: U.S. weekly jobless claims at 1330 GMT
(Adds BMI lifting gold price forecast, updates prices)
By Manolo Serapio Jr
MANILA, March 3 (Reuters) - Gold edged higher on Thursday as
strong inflows into gold-backed funds increased optimism the
metal could extend this year's rally despite a revival in risk
appetite that lifted Asian equities to a two-month high.
Gold, which has gained nearly 17 percent this year to be
among the top performing commodities, was trading not far below
a one-year peak.
Spot gold XAU= was up 0.1 percent at $1,241.40 an ounce by
0655 GMT, after rising 0.7 percent on Wednesday. The metal hit a
one-year high of $1,260.60 on Feb. 11 as uncertainty in the
global economy sharpened investor demand for safe havens.
Michael McCarthy, chief market strategist at CMC Markets,
said he was a bit surprised that gold had risen overnight given
the shift back to risky assets, adding that the continued flows
into gold-backed exchange-traded funds (ETFs) provided support.
Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed ETF, rose to 25.35 million ounces on Wednesday, the
most since September 2014. GOL/ETF
But McCarthy warned gold could come under pressure as global
risk appetite increases.
"It's clear from the selling of bonds that the safe haven
aspect of the investment market is less desirable than it was a
few days ago," he said.
U.S. gold for April delivery GCcv1 was unchanged at
$1,242.30 an ounce.
BMI Research, part of Fitch Ratings, said it raised its 2016
gold price forecast to $1,150 from $1,000 in early February.
"A recalibration of expectations for the global monetary
policy trajectory by investors and additional equity market
weakness will combine to create a more positive environment for
gold prices than we previously anticipated," BMI said in a
report.
Still, Asian shares and oil prices climbed on Thursday after
a report showed U.S. private-sector jobs rose 214,000 in
February, beating market forecasts and lifting expectations for
the more comprehensive U.S. non-farm payrolls due out on Friday.
U.S. non-farm payrolls, which include both public and
private-sector employment, are estimated to have risen by
190,000 last month after increasing by 151,000 in January,
according to a Reuters poll of economists. USNFAR=ECI
"There is likelihood of positive surprise on Friday and that
will also add to the weight on gold," said McCarthy.
Spot palladium XPD= was flat at $514.75 an ounce while
platinum XPT= gained 0.5 percent to $936 and silver XAG=
rose 0.3 percent to $14.97.