PRECIOUS-Gold edges up, but gains limited by rate hike prospects

* Spot gold may retest resistance at $1,182 -technicals
    * Funds cut bullish COMEX gold stance to 11-month low
    * Palladium hits highest in more than a month

 (Adds comment, updates prices)
    By Swati Verma
    BENGALURU, Jan 9 (Reuters) - Gold edged up slightly in a
technical rebound on Monday after one-month highs hit last week
were undercut by the prospects of more interest rate hikes from
the U.S. Federal Reserve. 
   Spot gold edged 0.1 percent higher to $1,174.23 an
ounce by 0715 GMT. Gold gained nearly two percent last week, its
biggest weekly rise since early November, although it fell on
Friday as Fed officials commented on data that pointed to an
improving U.S. economy.
    U.S. gold futures were up 0.1 percent at $1,174.10
per ounce.
    "Some kind of rebound in gold prices is still in place,"
said Mark To, head of research at Hong Kong's Wing Fung
Financial Group.
    "However, the impact of monetary policy changes like rising
U.S. interest rates will be felt gradually and the quick rebound
in gold price should be finished."
    Spot gold is up nearly 5 percent from mid-December, when it
touched 10-month lows.
    "Seasonally, January is a very bullish month for gold," said
Amit Kumar Gupta, research head at Adroit Financial Services,
adding that the Chinese New Year this month is expected to
increase physical buying. 
     A slight correction in the dollar index from its recent
highs also helped gold prices, he added. 
    The dollar surged to 103.820, its highest level since
December 2002 last week. 
    Spot gold may retest a resistance at $1,182 per ounce, a
break above which could open the way towards $1,219 an ounce,
according to Reuters technical analyst Wang Tao. 
    Although U.S. employment increased less than expected in
December, U.S. jobs data on Friday showed a rebound in wages,
pointing to sustained labour market momentum. 
    Chicago Federal Reserve President Charles Evans said on
Friday the central bank could raise interest rates three times
this year, faster than he had expected just a few months ago.
    Evans and other regional Fed presidents are scheduled to
speak this week, and the outlook for U.S. rates may become even
clearer when Chair Janet Yellen appears at a webcast town hall
meeting with educators on Thursday. 
    "As long as the U.S. economic data is good, people are
expecting rate hikes to be more hawkish and short gold at $1,200
levels," To said.
    Expectations of U.S. interest rate hikes lowers demand for
the non-interest-paying bullion. 
    Hedge funds and money managers cut their bullish positions
in COMEX gold contracts for the eighth straight week in the week
to Jan. 3, taking their holdings to the smallest in 11 months,
U.S. Commodity Futures Trading Commission (CFTC) data showed on
    Among other precious metals, silver shed 0.2 percent
to $16.44 an ounce, while platinum gained 0.3 percent at
    Palladium was up over one percent at 766.20 an ounce,
after hitting its highest in more than a month at $768.10
earlier in the session. 

 (Additional reporting by Nallur Sethuraman in Bengaluru;
Editing by Tom Hogue and Amrutha Gayathri)