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PRECIOUS-Gold turns higher after Bank of England cuts rates

* BoE cuts UK interest rates for first time since 2009
    * Dollar firms after Wednesday's upbeat U.S. jobs data
    * GRAPHIC-2016 asset returns: reut.rs/1WAiOSC

 (Updates prices; adds comment, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, Aug 4 (Reuters) - Gold prices turned higher
on Thursday after the Bank of England cut interest rates for the
first time since 2009, though gains were muted by strength in
the dollar after the previous day's upbeat U.S. jobs data.
    In addition to the cut in rates to a record low 0.25
percent, the BoE said it would buy 60 billion pounds of
government debt to ease the blow from Britain's June 23 vote to
leave the European Union. 
    Spot gold was up 0.3 percent at $1,361.14 an ounce by
3:00 p.m. EDT (1900 GMT), off an earlier low of $1,348.50, while
U.S. gold futures for December delivery settled up 0.2
percent at $1,367.40. 
    Gold is highly sensitive to falling interest rates, which
cut the opportunity cost of holding non-yielding bullion. 
    "The revision in expectations for monetary policy in the
U.S., Japan, the euro zone and the UK has played a big role in
the rise in the gold price so far this year, and we expect it to
continue," Capital Economics analyst Simona Gambarini said.
    Further policy loosening in the UK helped push European
shares up 0.6 percent, while the dollar rose 0.2 percent against
a currency basket, drawing strength from a
stronger-than-expected ADP jobs number on Wednesday. 
    "The ADP report gave some hopes for the employment report on
Friday," ABN Amro analyst Georgette Boele said. "Now we have to
see how the report is going to be tomorrow."
    The ADP report raised speculation that the U.S. non-farm
payrolls on Friday may be strong enough to revive expectations
for a Federal Reserve interest rate hike later this year, after
it lifted rates for the first time in nearly a decade in
December.
    "Many investors are indeed piling into gold as a hedge
against their incremental stock purchases and growing
low-quality bond portfolios (WGC), and that hedge has worked out
well this year, and it will likely continue to in the near
term," said RBC Capital Markets in a report.
    "Any signs that risk appetite is returning represents a risk
to gold's upside."
    Among other precious metals, silver was up 0.1
percent at $20.39, while platinum was up 0.1 percent at
$1,160. Palladium was down 0.7 pct at $704.15.  
    Capital Economics said in a note that it sees lower demand
for platinum group metals from the auto industry due to the UK's
exit from the European Union, "as big purchases like cars could
be postponed until the uncertainty fades."

 (Additional reporting By Nallur Sethuraman in Bengaluru;
Editing by Meredith Mazzilli)
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