PRECIOUS-Gold hovers near 3-month peak after weak U.S. data

* Dollar languishes close to over 2-month low
* UBS raises palladium price forecasts

(Updates prices)
By Eileen Soreng
May 10 (Reuters) - Gold held firm near a three-month high on
Monday after last week's miss on the U.S. jobs growth numbers
weighed on the dollar and bolstered expectations that interest
rates will remain low.
Spot gold XAU= rose 0.4% to $1,836.89 per ounce by 1:44
p.m. EDT (1744 GMT), after touching its highest since Feb. 11 at
$1,845.06. U.S. gold futures GCv1 settled 0.3% higher at
$1,837.60.
"The disappointing U.S. job number ultimately catalyzed a
round of algorithmic short-covering," said TD Securities
commodity strategist Daniel Ghali.
Also supporting the precious metal was the return of
discretionary capital flowing into gold alongside strong
physical demand from China and India last month prior to Indian
lockdowns, Ghali added. GOL/AS
U.S. nonfarm payrolls data on Friday showed jobs growth
unexpectedly slowed in April, pushing the dollar to an over
two-month trough, making gold less expensive for holders of
other currencies. USD/ The lower-than-expected job numbers upset investors' hopes
of a roaring recovery in the world's largest economy and that
the U.S. Federal Reserve might tighten policy earlier than
expected.
The U.S. central bank has pledged to keep interest rates low
until inflation and employment pick up. Lower interest rates
reduce the opportunity cost of holding non-yielding bullion.
"What is missing from the recent rise in prices and would be
required to revive the rally is the participation of safe-haven
seekers," Julius Baer analyst Carsten Menke said in a note.
Elsewhere, palladium XPD= rose 1.5% to $2,971.39 per ounce
after hitting an all-time high last week on supply shortfall
worries.
UBS raised its end-June and end-September price forecasts
for the metal, used mainly in emission-reducing auto catalysts
for vehicles, to $3,100 per ounce. The bank expects the palladium market to be under-supplied
by about 1 million ounces this year.
Silver XAG= eased 0.2% to $27.39 per ounce, while platinum
XPT= climbed 0.8% to $1,258.87 per ounce. Both metals earlier
reached a more than two-month peak.