* Stocks rebound after China drops circuit breaker
* Traders await U.S. payrolls data due at 1330 GMT
* GRAPHIC: Commodities 2016-http://link.reuters.com/reb25t
(Updates prices)
By Jan Harvey
LONDON, Jan 8 (Reuters) - Gold prices fell as much as 1
percent on Friday, retreating from the previous day's nine-week
high as stock markets steadied after this week's rout and the
dollar strengthened.
European stocks edged up 0.1 percent after Asian shares
gained, with battered Chinese equities rising strongly after
China suspended its market circuit breaker and guided the yuan
higher for the first time in nine days. MKTS/GLOB
Jitters over the Chinese economy had spooked global stock
markets and sent investors sprinting to safe-haven assets this
week, sending gold sharply higher.
Spot gold XAU= peaked earlier on Friday at $1,112 but
quickly pared gains. It was down 0.9 percent at $1,099.05 an
ounce at 1305 GMT, while U.S. gold futures GCv1 for February
delivery were down $8.90 an ounce at $1,098.90.
"Concerns over China, and possibly the Middle East, have
prompted some safe-haven demand. That has stirred the gold
price," Capital Economics analyst Simona Gambarini said. "But as
we know, safe-haven demand can be quite volatile."
"We are generally positive on the gold price for the year,
but not necessarily on safe-haven demand. That's a wild card."
Investment appetite for gold 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.
Attention was turning to U.S. non-farm payrolls data due at
1330 GMT, which traders will watch for clues on the outlook for
U.S. interest rate policy.
The prospect of rising rates in the United States was a key
factor pushing gold down more than 10 percent last year.
A strong report could be seen as prompting the Federal
Reserve to raise rates at a faster pace. That could dent demand
for non-interest-paying gold, while boosting the dollar.
Silver XAG= was down 1.7 percent at $14.05 an ounce, while
platinum XPT= was flat at $873.45 an ounce. Palladium XPD=
was up 1.1 percent at $497.55 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 11 percent.
"Technically the chart looks horrible -- the metal has
collapsed through the $500 figure and the only support visible
on a 10-year weekly chart is at $447 -- the 61.8 percent
Fibonacci retracement of the entire 2009 to 2014 rally," ICBC
Standard Bank said in a note.
"By that point the metal will be oversold and due a bounce,
but not because there is any 'deficit' of metal."