Gold price edges down, market slow before US data

TOKYO, July 7 (Reuters) Gold inched down on Friday on profit-taking in cautious trade ahead of the release of a US employment report that could have an impact on currency and precious metals trading.

The cash price for gold was at 9.80/631.30 an ounce at 0252 GMT, compared with 2.20/633.70 in late New York on Thursday when the metal rose as high as 4.75.

''I think the market is mostly waiting for the release of the employment figures,'' a Tokyo analyst said.

The spot price fell due to profit-taking selling ahead of the release of the U.S. employment data later today, he said.

He said that interest rates were expected to be the key factor influencing dollar-based gold's direction for now.

Traders have said a strong U.S. employment report might give the Federal Reserve latitude to keep increasing U.S. interest rates, which could lift the dollar and limit gold's gains.

Gold has attracted little safe-haven buying despite news that North Korea has vowed to carry out more missile tests and threatened to use force if the international community tried to stop it. The communist country is believed to have launched at least seven missiles this week, despite international protests.

Japan and the United States pushed on Thursday for a U.N.

Security Council resolution on North Korea.

Experts believe that gold's bullish trend will continue.

A Reuters poll of 31 analysts and senior traders showed gold would sprint up about 40 percent to an average 5 an ounce in 2006 from its 2005 average of 5.05. [ID:nL06834789] The rise was expected to continue at a blistering pace next year, even if other commodities hit a rough patch, on expected dollar weakness.

Elsewhere, the most active contract on the Tokyo Commodity Exchange gold futures rose as high as 2,370 yen, but later gave up some of its early gains to finish the morning at 2,356 yen, up 14 yen.

The analyst said TOCOM gold was tracking the rise in New York futures, but that the benchmark contract gave up early gains when it failed to top Thursday's peak of 2,370 yen.

''It's beginning to look slightly heavy at the top,'' he said.

Precious Metals Prices at 0305 GMT Last Net Change Pct Move Gold 629.50 -3.30 -0.52 Platinum 1227.50 -4.50 -0.37 Paladium 324.00 3.00 +0.93 Silver 11.49 -0.03 -0.26 Change so far in 2006 Metal Latest bid End prev year Pct Move Gold 629.50 517.20 +21.71 Platinum 1227.50 968.00 +26.81 Paladium 324.00 254.00 +27.56 Silver 11.49 8.81 +30.42 Reuters AD DS1048