PRECIOUS-Gold edges up, fading stimulus hopes weigh

Thu Apr 5, 2012 10:20am GMT

* Stronger dollar caps gold's gains

* German government bonds hold near three-week highs

* Coming up: U.S. weekly jobless claims 1230 GMT (Updates throughout, previous SINGAPORE)

By Michelle Martin

LONDON, April 5 (Reuters) - Gold inched higher on Thursday after falling to a near three-month low the previous day as weaker prices tempted some buyers, but gains were capped by a stronger dollar and fading hopes for a fresh round of monetary stimulus in the United States.

Spot gold was up 0.1 percent at $1,620.59 an ounce at 0954 GMT, while U.S. gold futures for June delivery were up $8.20 an ounce at $1,622.30.

The metal has fallen nearly 3 percent this week and while prices regained some ground on Thursday, it was still hovering around its lowest since early January. Traders are awaiting key U.S. payrolls data due on Friday for fresh direction.

"You have the release of the U.S. labour report tomorrow so there is some risk over the weekend," said Peter Fertig, a consultant for Quantitative Commodity Research.

He said volumes were likely to be light, with European and U.S. markets largely closed for the Easter weekend. "For some investors (there is) risk and therefore they are closing short positions."   Continued...

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