LONDON, Dec 5: Gold inched higher to hold just below $770 an ounce, supported by slightly firmer oil prices, as traders took to the sidelines ahead of this afternoon’s key US jobs data.

Spot gold was quoted at $769.60/771.60 an ounce at 1007 GMT, little changed from $765.70 an ounce late in New York on Thursday.

The foreign exchange markets, which usually have a significant impact on gold, were quiet as traders awaited direction from the US non-farm payrolls data, due at 1330 GMT.

This is the most important figure to be released and will have a significant impact on those markets which drive the gold price, said Dresdner Kleinwort consultant Peter Fertig.

A stronger-than-expected fall in the payrolls number would definitely be regarded by the markets as a sign of a deeper and more prolonged recession in the United States, Fertig said, adding that it could knock stock markets and crude oil prices lower.

A larger-than-expected number could pressure the dollar as it would signify more trouble for the US economy, but if risk aversion is boosted, the US currency could rise as investors turn to dollars as a haven from risk.

However, gains in gold are being limited by expectations inflation will fall after sharp drops in the price of many raw materials such as crude oil and industrial metals.

Gold prices (are) slipping due to near term deflationary pressures as commodities slip, said John Meyer, an analyst at Fairfax.

However, the yellow metal has been outperforming other commodities and equities. Among other precious metals, silver trod water along with gold, and was quoted at $9.47/9.55 an ounce against $9.46 late in New York on Thursday.

Platinum and palladium inched higher but remained range bound as they consolidated after sharp price falls earlier in the week.

Both metals have come under pressure from a spate of bad news from the global auto market.

Spot platinum was quoted at $800/815 an ounce, up from $786.50 an ounce late on Thursday.

Spot palladium was at $168.50/176.50 an ounce against $166.50.—Reuters