PRECIOUS-Gold firm as sluggish U.S. data lowers rate hike prospects

* Speculators cut net longs in gold, silver
    * Platinum, palladium rise from Friday's 2-wk lows
    * SPDR Gold holdings drop 1.2 percent on Friday

 (Updates prices)
    By Sethuraman N R
    Aug 15 (Reuters) - Gold edged up on Monday as sluggish U.S.
retail sales data on Friday lowered expectations of a near-term
interest rate hike by the Federal Reserve.
    Spot gold was up about 0.4 percent at $1,339.12 an
ounce at 0641 GMT. The metal rose as much as 1.3 percent to a
high of $1,355.80 on Friday, but ended slightly lower on
    U.S. gold was up 0.2 percent at $1,345.80 an ounce.
    U.S. retail sales were unexpectedly flat in July as
Americans cut back on purchases of clothing and other goods,
signalling a moderation in consumer spending that could lessen
the expectations of faster economic growth in the third quarter.
     "The U.S. macro data is very mixed and expectations of a
rate hike are already priced in gold," said Helen Lau, analyst
at Argonaut Securities in Hong Kong. 
    "The gold supply is coming back, but overall demand is not
good. From now, we need more catalyst to drive the investment
demand higher in order to offset the supply increase from gold
     The dollar was on the defensive on Monday, weighed down by
the U.S. retail sales data. 
     A stronger dollar discourages gold buying by making the
metal more expensive in other currencies. 
    Summer holidays in the Northern hemisphere are also keeping
gold in check, with trading thin and range-bound, said Sam
Laughlin, precious metals trader with MKS PAMP Group. 
    "We don't expect to move too far outside of the $1,330-
$1,360 range over the short term," Laughlin said. 
    "Friday's soft U.S. retail sales and producer prices data
may provide some respite for the metal this week, however
participants are pulling back their long bets, which is weighing
upon rallies," he added.
    Speculators cut their net long positions in COMEX gold and
silver futures and options in the week to Aug.9, Commodity
Futures Trading Commission (CFTC) data showed on Friday.
    Spot gold may bounce up moderately to $1,342 per ounce,
before retesting a support at $1,334, as suggested by its wave
pattern and a Fibonacci projection analysis, Reuters technical
analyst Wang Tao said. 
    Holdings of SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, fell 1.22 percent to 960.45 tonnes on
Friday from Thursday. 
    Silver was up 0.6 percent at $19.82 an ounce. 
    Platinum and palladium were up 1 at $1,126.80
and $691, respectively. Both hit their lowest in more than two
weeks on Friday.

 (Reporting By Nallur Sethuraman in Bengaluru; Editing by Tom
Hogue and Subhranshu Sahu)