PRECIOUS-Gold drops as five-session winning streak snapped

* Unwinding of euro trade, Greece worries pressure gold

* Strong ETF demand provides underlying support

* Coming up: U.S. non-farm payrolls data due on Friday

(Recasts, updates comments, closing prices, changes dateline from LONDON, new byline)

By Frank Tang

NEW YORK, March 4 (Reuters) - Gold fell on Thursday, snapping a five-session winning steak, as investors unwound positions added earlier this week due to a euro rally and currency volatility amid a Greek debt crisis.

Some bullion traders also took profits ahead of a closely watched U.S. jobs report on Friday. However, strong investment demand in exchange traded funds should provide underlying support for gold prices, analysts said.

Gold had gained as much as $30 an ounce this week before Thursday's decline, as uncertainty about Greece's ability to repay its crippling debt increased the metal's appeal as a hedge against currency volatility.

"A lot of what we have seen in gold is currency related, but disappointment about Greece and the strength of the dollar is pushing gold back down," said Nicholas Brooks, head of research and investment strategy for ETF Securities Ltd.

Spot gold <XAU=> was at $1,131.55 an ounce at 3:04 p.m. EST (2004 GMT), against $1,139.35 late in New York on Wednesday. Before Thursday, bullion has been closing higher since Feb. 24, according to Reuters data.

U.S. April gold futures <GCJ0> on the COMEX division of the NYMEX settled down $10.20 at $1,133.10 an ounce.

The euro fell against the dollar as comments by the European Central Bank reinforced the view that euro zone interest rates will stay low in the foreseeable future. [USD/]

Speaking at a press conference after the ECB opted to leave rates at a record low 1.0 percent, the bank's president Jean-Claude Trichet was seen to reiterate that no hike in euro zone rates is imminent. [ID:nLDE62307B]

"There is still a link on a day-to-day and weekly basis between gold and the dollar, so if the euro weakens gold will come under pressure," said Standard Bank analyst Walter de Wet. "We might test down towards $1,100 if the euro goes to $1.30."

Fears over the outlook for a number of smaller euro zone economies -- Portugal, Ireland, Italy, Greece and Spain -- have helped push the single currency down nearly 5 percent versus the dollar so far this year.

The ECB took further steps to unwind the extraordinary help it has given the euro zone economy in the global crisis on Thursday, although it still forecasts a fragile recovery. [ID:nLDE62307B]

As gold is a non-interest bearing investment, it tends to benefit from a low interest rate environment, which reduces the opportunity cost of holding the precious metal.

UNDERLYING INVESTMENT DEMAND

Brooks said ETF Securities has seen strong inflow across all products as longer-term investors were buying gold ETFs to hedge against rising sovereign risk and currency fluctuations.

"The stability of the euro has now been called into questions, so investors are not left with too many options from a currency standpoint, and a lot of investors are diversifying into gold," Brooks said.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust <GLD>, said its holdings was at 1,115.511 tonnes as of March 3, up from 1,111.556 tonnes in the previous business day. GLD holdings has been climbing for a second straight day. [GOL/SPDR]

Record demand drove the U.S. Mint's silver coin sales 40.2 percent higher in the first two months of the year to 5.643 million ounces from 4.025 million ounces, the mint's website showed. [ID:nN04464987]

Gold traders now focus on Friday's U.S. February non-farm payrolls report, which is expected to show a loss of 50,000 jobs, compared with a loss of 20,000 in January.

Silver <XAG=> was at $17.09 an ounce versus $17.17, platinum <XPT=> was at $1,577.50 an ounce versus $1,575.50, and palladium <XPD=> at $456.50 against $446.50.

Close Change Pct 2009 YTD

Chg Close % Chg US gold <GCJ0> 1143.30 5.9 0.5 1096.20 4.3 US silver <SIK0> 17.329 0.265 1.6 16.845 2.9 US platinum <PLJ0> 1583.50 7.50 0.5 1471.00 7.6 US palladium <PAM0> 450.50 5.65 1.3 408.85 10.2 Prices at 2:27 p.m. EST (1927 GMT) Gold <XAU=> 1140.20 5.70 0.5 1096.35 4.0 Silver <XAG=> 17.20 0.28 1.7 16.84 2.1 Platinum <XPT=> 1573.00 6.50 0.4 1465.50 7.3 Palladium <XPD=> 447.00 8.000 1.8 405.50 10.2 Gold Fix <XAUFIX=> 1136.50 0.25 0.0 1104 2.9 Silver Fix <XAGFIX=> 17.17 60.00 3.6 16.99 1.1 Platinum Fix <XPTFIX=> 1580.00 1.00 0.1 1466 7.8 Palladium Fix<XPDFIX=> 444.00 0.00 0.0 402 10.4 (Additional reporting by Jan Harvey in London; Editing by Marguerita Choy)