PRECIOUS-Gold slips on U.S. jobs data, Fed eyed

* Strong jobs report, dollar rise dampen gold's appeal

* SPDR gold ETF logs biggest-ever quarterly outflow in Q1

* U.S. Mint reports highest quarterly silver coin sales

* Coming up: ISM non-manufacturing index on Tuesday (Updates prices to market close)

By Frank Tang

NEW YORK, April 1 (Reuters) - Gold slipped on Friday as an encouraging U.S. jobs report boosted the dollar, though euro zone debt worries and unrest in the Middle East lifted bullion off lows.

Positive nonfarm payrolls and manufacturing data confirmed a strengthening U.S. economy, but economists said the news was not enough to push the Federal Reserve away from an ultra-easy monetary stance that has helped gold hit record highs.

"As economic conditions appear to be improving, evidenced by today's data, gold suffers as a store of value in times of fiscal or financial uncertainties," said Mark Luschini, chief investment strategist at broker-dealer Janney Montgomery Scott with $53 billion in assets under management.

Spot gold dropped 0.6 percent to $1,428.20 an ounce as of 2:01 p.m. EDT (1801 GMT), sharply off its low at $1,412.55 hit earlier in the session.

Bullion has risen about 0.5 percent this week for its second consecutive weekly gain. It hit a record $1,447.40 an ounce last week.

U.S. gold futures for June delivery settled down 0.8 percent at $1,428.90, with COMEX trading volume slightly below its 30-day average after strong turnover earlier this week partly due to contract rollover.

Gold recorded a 10th consecutive quarter of gains in the first three months of 2011, but it was the smallest rise since the financial crisis gripped markets in late 2008. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic of gold's quarterly performance:

http://r.reuters.com/cew78r Graphic on U.S. March nonfarm payrolls:

http://r.reuters.com/kab88r

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"Just because we had a good payrolls number today, that doesn't mean that one data point makes things all well and good," Luschini said.

Luschini said political unrest in the Middle East and euro zone sovereign debt issues underpinned gold, and end-of-quarter fund allocation also boosted the metal earlier this week before the trade unwounded on Friday.

A successful debt sale by Portugal on Friday did little to cull expectations it will soon join the euro zone bailout list, while Ireland's credit rating was cut after bank stress tests revealed another black hole. [ID:nLDE7301QM]

Despite a rally in energy prices, stagnant growth in wages does not bode well for gold's inflation-hedge appeal, said Peter Buchanan, senior economist at CIBC World Markets.

HAWKISH FED COMMENTS, ECB IN FOCUS

Even as most economists agree the Fed will not tighten monetary policy in the short term, recent hawkish comments by top Fed officials are weighing on bullion investor sentiment.

Jeffrey Lacker, Richmond Fed president, said the U.S. central bank could raise interest rates by the end of the year to curb rising inflation. [ID:nN01191151]

Gold tends to suffer when rates climb, as the opportunity cost of holding non-yielding assets increases.

Nick Moore, head of commodity strategy at RBS, said gold prices were likely to suffer further from expectations that the European Central Bank will raise interest rates this month.

Investment products such as gold-backed exchange-traded funds saw less interest, with the No. 1 SPDR Gold Trust reporting its biggest ever quarterly outflow in the first quarter.

U.S. Mint data showed gold American Eagles sales were the strongest in the first quarter since the end of 2009, and quarterly sales of silver American Eagle coins rose to a record in the same period. [ID:nLDE7300HI]

Silver gained 0.2 percent to $37.69 an ounce.

Platinum group metals rose but gains were limited after General Motors Co said U.S. sales in March came in below expectations. [ID:nN01199996]

Platinum rose 0.2 percent to $1,768.99 an ounce, while palladium climbed 1.6 percent to $770.22. Prices at 2:01 p.m. EDT (1801 GMT)

LAST/ NET PCT YTD

CLOSE CHG CHG CHG US gold 1428.90 -11.00 -0.8% 0.5% US silver 37.888 0.000 0.0% 22.5% US platinum 1776.90 -6.30 -0.4% -0.1% US palladium 775.05 7.15 0.9% -3.5% Gold 1428.20 -8.28 -0.6% 0.6% Silver 37.69 0.09 0.2% 22.1% Platinum 1768.99 2.69 0.2% 0.1% Palladium 770.22 11.87 1.6% -3.7% Gold Fix 1418.00 -16.50 -1.2% 0.5% Silver Fix 37.63 -24.00 -0.6% 22.9% Platinum Fix 1773.00 6.00 0.3% 2.4% Palladium Fix 772.00 4.00 0.5% -2.4% (Additional reporting by Jan Harvey in London; Editing by Dale Hudson)