By Jan Harvey
LONDON (Reuters) - Gold rose on Friday, erasing earlier losses, after weaker than forecast U.S. payrolls data knocked the dollar lower and as concerns over the prospect of a U.S.-China trade war kept the metal on track for a narrow weekly gain.
The U.S. currency fell versus the euro and Wall Street stock futures added to losses after the report showed that the U.S. economy created the fewest jobs in six months in March, easing concerns over aggressive interest rates hikes.
Spot gold was at $1,333.44 an ounce at 1325 GMT, up 0.6 percent and off an earlier low of $1,321.16. U.S. gold futures for June delivery were 0.7 percent higher at $1,337.30 an ounce.
Spot prices are up 0.7 percent since last Friday, but are well off their highs for the week. Prices rose on Monday on concerns over the prospect of a China-U.S. trade war before dropping to a one-week low by Thursday after both countries signalled a willingness to negotiate.
"The payrolls report has provided a small boost to gold, but overall it's had quite a dismal week," Saxo Bank's head of commodity strategy Ole Hansen said. "(Gold) has really been struggling to get anything out of the heightened tensions we've seen on the trade front."
"It's also been a week where the dollar has shown its teeth a bit, bond yields have moved a tad higher and stocks at this stage are still trading up on the week. That has been a counter to the underlying geopolitical uncertainty we're seeing."
U.S. President Donald Trump said late on Thursday that he had instructed U.S. trade officials to consider $100 billion in additional tariffs on China, fuelling an already heated dispute between the world's two biggest economies.
On Friday the United States also sanctioned 24 Russians, including oligarchs and government officials, and 14 groups over what it called a range of malign activities by Moscow to subvert Western democracies, the Treasury Department said.
Among other precious metals, silver was up 0.8 percent at $16.49 an ounce, while platinum was 0.7 percent lower at $915.90 an ounce.
Palladium was up 0.2 percent at $906.90 an ounce, after 10 successive sessions of losses. The autocatalyst metal is still on track to end the week down nearly 5 percent.
"Last year's uptrend has reversed and palladium prices are down more than 20 percent from their January high," Julius Baer said in a note. "We see them better aligned with a softer global car market and shift our view to neutral."
(Additional reporting by Swati Verma in Bengaluru; Editing by David Holmes and Adrian Croft)
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