Gold Falls on Thin Volume, Follows Risky Assets

Gold fell on Friday in one of the quietest trading day, as the metal tracked riskier assets on fresh worries about the euro zone bailout fund and a mildly encouraging U.S. nonfarm payrolls report.

Bullion came under pressure on market frustrations that the euro zone won verbal support but no new money at a Friday's G20 summit for its tortured efforts to overcome a sovereign debt crisis.

The metal -- a traditional safe haven which has recently taken to tracking riskier assets -- fell with U.S. equities after data showed U.S. hiring slowed in October but the unemployment rate also fell, pointing to some improvement in the still-weak labor market.

Gold was also pressured as commodity brokers raced to finish transferring thousands of customers of bankrupt rival MF Global, shifting their attention to the delicate task of ensuring new clients' margins are topped by next week.

Perhaps there was a bit of wait-and-see and the idea that investors are more comfortable not doing anything today, and waiting for the (MF Global) dynamic to play itself out, said Erik Gebhard, principal at futures broker Altavest.

Spot gold fell 0.4 percent to $1,754.89 an ounce by 3:18 p.m. EDT.

U.S. gold futures for December delivery settled down $9 at $1,756.10 an ounce.

U.S. futures trading volume was less than 88,000 lots by 3:20 p.m., Reuters data showed, set to be the top three lowest daily volume in 2011.

Traders cited the demise of now-defunct commodities broker MF Global for weak turnover in gold futures.

Following a court order on Wednesday, the MF Global trustee has worked with the CME Group and a handful of other mostly independent futures commission merchants (FCMs) to move the bankrupt broker's 50,000 or so commodity accounts in bulk to new clearing firms, along with 60 percent of collateral.

The metal, however, posted its second consecutive weekly gain, helped by renewed safe-haven buying amid uncertainty to the future of the European Union.

We are holding technical support at the 25-percent Fibonacci retracement at $1,747 an ounce. Risk is coming off because some people think everything is going to be fine, and others who think gold is going to explode next week, said COMEX gold options floor trader Jonathan Jossen.

The gold market will closely monitor news out of the G20 meeting this weekend.

Leaders of the world's major economies told Europe to sort out its own problems and deferred until next year any move to provide more crisis-fighting resources to the International Monetary Fund.

Silver was down 1.2 percent at $34.05 an ounce.

The silver market largely ignored an update from the U.S. futures regulator about its continuing investigations onto possible unlawful acts or manipulation in silver markets in a probe that began more than three years ago.

Platinum was off 0.3 percent to $1,628.74 an ounce and palladium was up 0.2 percent at $653.75.