New York 10/04/2012 - Gold futures held steady Tuesday morning, supported by safe-haven demand as investors worry about the fragility of the US labour market and the beginning of earnings season.

Gold for June delivery on the Comex division of the New York Mercantile Exchange was last up $2.90 at $1,646.90 an ounce. Trade has ranged from $1,641.60 to $1,655.90.

On Friday, the Commerce Department reported that the US economy only added 120,000 jobs in March, the slowest growth rate since last October and well below an expected gain of 203,000.

This report revived gold bulls' hopes that the Federal Reserve still might be forced to launch a third-round of quantitative easing (QE3) later this year. Monetary accommodation is seen as unequivocally bullish for precious metals as extra liquidity tends to debase the dollar and create future inflationary risks.

Later today, Alcoa will announce its first quarter earnings. Given the recent bearish sentiment, there are concerns that a big miss by the US-based aluminium producer would lead stocks and industrial commodities to pull back further. Both the Dow Jones industrial average and S&P 500 are in the midst of four session losing streaks.

Comex open interest in gold dropped 11.8 tonnes last week, according to the CFTC, marking a 27-month low and six straight weeks of declines. During the slide, open interest has fallen by a total of 215 tonnes, which has been accompanied by an 8 percent fall in the gold price, Standard Bank noted.

Elsewhere, India's jewellers have reopened their shops after being closed for 20 days to protest a government plan to double import duties on gold to four percent.

The merchants said that they will not strike again until at least May 11. This is a positive for gold demand, especially considering the Akshaya Tritiya festival begins on April 24.

The Chinese government reported over the weekend that inflation rose at an annual rate of 3.6 percent in March, slightly higher than expected. This lent some support to gold as the yellow metal is often bought as a hedge against inflation.

As for the other precious metals, Comex silver for May delivery was last up 22.6 cents at $31.755 an ounce, while platinum futures for July delivery on the Nymex were down $7.20 at $1,611 an ounce and the June palladium contract was at $642.55 an ounce, down $1.45.

 (Editing by Martin Hayes)

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