* U.S. jobs growth slows sharply in April
* Dollar hovers close to over 2-month low
* UBS raises palladium price forecasts
(Updates prices, analysts comment)
By Brijesh Patel
May 10 (Reuters) - Gold prices edged higher on Monday as tepid U.S. jobs numbers last week cemented expectations that interest rates will remain low for some time, denting the dollar and boosting non-yielding metal's appeal.
"We are seeing a carry over this morning from Friday's non-farm payrolls figures which were surprisingly disappointing. Clearly both the U.S. dollar and yields remain on the back foot, supporting gold," said independent analyst Ross Norman. US/
U.S. nonfarm payrolls data on Friday showed jobs growth unexpectedly slowed in April, pushing the dollar to a more than two-month trough, making gold less expensive for holders of other currencies. USD/ lower-than-expected job numbers came as a speed bump on investors' hopes of a roaring recovery in the world's largest economy and tamped down bets on the U.S. Federal Reserve tightening policy earlier than expected.
The U.S. central bank has pledged to keep interest rates low until inflation and employment pick up. Lower interest rates decrease the opportunity cost of holding non-yielding bullion. Julius Baer analyst Carsten Menke said, holdings of physically backed gold products have not recorded any inflows in months.
"What is missing from the recent rise in prices and would be required to revive the rally is the participation of safe-haven seekers," Menke said in a note.
Elsewhere, palladium XPD= rose 2.2% to $2,991.29 per ounce after hitting an all-time high last week on supply shortfall worries.
"We expect the (palladium) market to continue tightening over the next three months on auto restocking and the lingering impact from Norilsk supply disruptions," Citi analysts said in a note.
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