SINGAPORE, April 9 (Reuters) - Gold gained more than half a
percent on Monday after disappointing U.S. jobs data revived
hopes for further monetary easing, while appetite for the metal
was also boosted as China inflation spiked.	
    Bullion's appeal as a hedge against inflation was burnished
as U.S. employers hired far fewer workers in March than in
previous months, keeping the door open for the Federal Reserve
to provide more monetary support for a still sluggish economy.
 	
    A higher-than-expected reading on China's annual inflation
in March also supported sentiment in gold, as analysts dismissed
the possibility that the data would dissuade Beijing from its
pro-growth monetary policy. 	
    "If we see more RRR (reserve requirement ratios) cuts, it
will be positive for gold as it will raise inflation outlook
down the road," said Li Ning, an analyst at Shanghai CIFCO
Futures. 	
    Rampant inflation in China contributed to the explosive gold
demand from investors in 2011. China's physical gold demand
jumped 20 percent last year, compared to a 7-percent rise in
global demand, according to the World Gold Council.	
    Spot gold rose as much as 1 percent in early hours to
$1,648 an ounce, before easing to $1,639.80 by 0329 GMT. Gold
dropped more than 2 percent last week after U.S. policymakers
showed waning interest in further quantitative easing. 	
    U.S. gold gained 0.7 percent to $1,641.20.	
    	
    	
    BEWARE OF DOLLAR 	
    Despite the sluggish payrolls data, analysts said a
generally improving U.S. economy and a dragging euro zone debt
crisis could lead to further dollar strength, which in the short
term may weigh on commodities priced in the greenback, including
gold. 	
    The dollar index edged up on Monday after sliding on
the U.S. jobs data in the previous session. But the dollar still
managed to post a 1.3-percent gain last week. 	
    "The pattern we've seen over the past few months, namely a
strong U.S. and a weaker Europe, is likely to continue to keep
the dollar supported," said Li of Shanghai CIFCO.	
    Data from the U.S. Commodity Futures Trading Commission
echoed the sentiment. Speculators cut their bullish bets on gold
futures and options in the week ended April 3. 	
    In the physical market, jewellers in India called off their
three-week-old strike on Saturday, an industry official said, on
assurances from Finance Minister Pranab Mukherjee that the
government would consider scrapping a budget proposal to levy
excise duty on unbranded jewellery. 	
    The sharp drops in prices in the last week attracted some
physical buying interest from China, traders said.	
    "Premiums in China were much higher and that attracted quite
a bit of buying," said a Shanghai-based trader.	
    Buying has slowed as prices have pulled back from a near
three-month low of $1,611.80 an ounce hit last week, traders
said. 	
    	
   Precious metals prices 0329 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1639.80    9.58   +0.59      4.86
  Spot Silver        31.77    0.05   +0.16     14.73
  Spot Platinum    1609.74   18.39   +1.16     15.56
  Spot Palladium    648.49   10.29   +1.61     -0.61
  COMEX GOLD JUN2  1641.20   11.10   +0.68      4.75        13695
  COMEX SILVER MAY2  31.78    0.04   +0.14     13.83         4872
  Euro/Dollar       1.3055
  Dollar/Yen         81.49
  COMEX gold and silver contracts show the most active months
 	

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