* Ford, GM report strong September car sales
* Gold prices rebound after four-day slide
* Traders await nonfarm payrolls data on Friday
* GRAPHIC: Asset returns http://link.reuters.com/dub25t
(Updates prices; adds comment, byline, NEW YORK dateline)
By Luc Cohen and Jan Harvey
NEW YORK/LONDON, Oct 1 (Reuters) - Palladium rose to its
highest level in nearly three months on Thursday on reports of
strong car sales from major automakers, continuing a trend in
which the component of gasoline engine autocatalysts gains at
the expense of platinum.
Gold prices were little changed ahead of the U.S. nonfarm
payrolls data for September due out on Friday.
Ford Motor (NYSE:F) Co F.N said on Thursday its U.S. sales rose 23
percent in September, the best level since 2004, while General
Motors said its total sales rose 12 percent. ID:nBw16n7Cxa
ID:nWNAB08HU9
Palladium is chiefly used in autocatalysts for gasoline
engines, while platinum is mainly used in autocatalysts for
diesel engines.
The strong car demand is seen as bullish for palladium,
though platinum is still suffering after Volkswagen's
VOWG_p.DE emissions scandal last week raised concerns about
diesel engine demand. ID:nL1N11S21N
"Strong vehicle sales across the board, ex VW, helped
palladium today," said Tai Wong, director of base and precious
metals trading for BMO Capital Markets. "We're seeing a
continuing trend of strength in palladium at the expense of
platinum."
Spot palladium XPD= was up 3.3 percent at $672 an ounce as
of 3:20 p.m. EDT (1921 GMT), after rising as high as $679.50,
its highest level since July 7. The rally accelerated when the
metal broke through its previous high for the week at $669.
Platinum XPT= was down 0.5 percent at $899.50.
Spot gold XAU= was down less than 0.1 percent at $1,114.06
an ounce, after dropping to $1,110.75, its lowest level since
Sept. 16. U.S. December gold futures GCv1 settled down $1.50
an ounce at $1,113.70.
Friday's payrolls data is being watched for clues on whether
the Federal Reserve will raise interest rates this year.
Expectations for a strong report rose after an upbeat reading of
U.S. private employment on Wednesday, pressuring gold.
ID:nL1N12011G
"All eyes are on the upcoming U.S. NFP data and this will
set the tone for trading," Naeem Aslam, chief market analyst at
Ava Trade, said.
Expectations the Fed is set to raise rates this year for the
first time in nearly a decade have pressured gold, as a rate
hike would potentially lift the opportunity cost of holding
non-yielding bullion while boosting the dollar.
"Traders are rearranging deck chairs ahead of the payroll
data tomorrow," Wong said. "Unless the number is a real outlier,
reaction may remain modest since most people don't think that
there will be a rate move at the October Fed meeting."
After the Fed's October meeting, the U.S. central bank will
have one more policy meeting this year, in December.
Silver XAG= was down 0.1 percent at $14.50 an ounce.