PRECIOUS-Gold steadies as virus concerns stall stock markets

(Updates prices)
* U.S. non-farm payrolls data due at 1330 GMT
* Gold headed for biggest weekly drop in three months
* Silver set for biggest weekly fall since early December

By K. Sathya Narayanan
Feb 7 (Reuters) - Gold was little changed on Friday as a
rally in global stock markets stalled as worries remained over
the economic impact from the coronavirus while investors awaited
U.S. jobs data for indications on the country's economic health.
Spot gold XAU= was down 0.1% at $1,565.20 an ounce at 1259
GMT. Down about 1.6% this week, it was on track for the biggest
weekly loss since early November.
U.S. gold futures GCcv1 also eased by 0.1%, dipping to
$1,569.00.
"On one side, insecurities come back with jitters in
European and Asian stock markets, which is supporting gold
prices, but on the other side, we have a stronger dollar," said
Commerzbank analyst Eugen Weinberg.
Worries over the virus, which has claimed almost 640 lives
and spread to numerous countries, pressured world markets that
were on course for the best week for equities since June.
MKTS/GLOB Weighing on bullion, however, the dollar .DXY rose to its
strongest against major rivals since mid-October.
The safe-haven metal was on track for its biggest weekly
decline in three months on the back of a series of strong U.S.
economic data, including a drop in unemployment benefits.

Market participants are now awaiting the U.S. non-farm
payrolls report, due later in the session, for cues on the
strength of the labour market and the U.S. economy.
The payrolls data is "one of the most important indicators
for the U.S. central bank" and investors want to know what the
report would mean for the Federal Reserve moving forward, said
UBS commodities analyst Giovanni Staunovo.
The Fed kept benchmark interest rates unchanged at its
January policy meeting, citing moderate economic growth and a
strong jobs market. Lower interest rates reduce the opportunity cost of holding
non-yielding bullion.
If the data comes in as strong as expected, the market might
not react that much, but should the data disappoint then the
U.S. dollar could snap back and fall, which is supportive for
bullion, Commerzbank's Weinberg said.
A weaker dollar makes greenback-denominated assets, such as
gold, cheaper for investors holding other currencies.
Elsewhere, palladium XPD= fell 1.5% to $2,312.32 an ounce
but was on track for its first weekly gain in three.
Silver XAG= slipped 0.5% to $17.71, set for its worst week
in two months, while platinum XPT= rose 0.6% to $966.94.