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PRECIOUS-Gold steady as dollar holds gains made after U.S. jobs data

    * Spot gold may retest support at $1,255/oz -technicals
    * Silver hits two-week low

 (Adds analyst comment, updates prices)
    By Nithin ThomasPrasad
    Aug 7 - Gold held steady near two-week lows on Monday, with
the dollar remaining supported by expectations of monetary
tightening in the United States following stronger-than-expected
jobs data last week.
    "The job data was very good; gold is pressured," said 
Richard Xu, a fund manager at China's biggest gold
exchange-traded fund, HuaAn Gold.
    "There is not much other geopolitical uncertainty in the
world, no extreme events. That's why risk-aversion is subsiding
and gold prices aren't doing well." 
    Gold is used as an alternative investment during times of
political and financial uncertainty.
    Spot gold        had risen 0.1 percent to $1,258.69 per
ounce by 0347 GMT. On Friday, it touched its lowest in just
under two weeks at $1,254 an ounce and registered its first
weekly decline in four.
    U.S. gold futures         for December delivery fell 0.02
percent to $1,264.30 per ounce.
    Asian stocks advanced on Monday, taking their cue from Wall
Street, while the dollar moderated but retained most gains made
on stronger-than-expected July jobs growth and the promise of a
U.S. tax plan that will repatriate corporate profits.
                  
    A stronger dollar makes bullion more expensive for holders
of other currencies, while higher interest rates lead to
increased bond yields and dampen demand for non-yielding gold.
    U.S. employers hired more workers than expected in July and
raised their wages, signs of labour market tightness that likely
clear the way for the Fed to announce a plan to start shrinking
its massive bond portfolio.             
    "Investors were quick to liquidate some long positions with
market pricing of another rate hike by the Fed rising slightly
as a consequence," said ANZ Research in a note.
    "However, the losses were limited, suggesting investors are
not completely convinced."
    Spot gold may retest support at $1,255 per ounce, a break
below which could cause a further loss to the next support at
$1,247, according to Reuters technical analyst Wang Tao.
    "We think gold is going to trade in a very tight range
because of the low level of liquidity in the market due to the
holidays (in Asia)," said Xu.
    In other precious metals, silver        was flat at $16.23
per ounce, having retouched Friday's over two-week low of $16.17
an ounce earlier in the session.
    Platinum        climbed 0.1 percent to $960.20 per ounce,
after hitting its highest since late April at $970.10 in the
previous session. It gained over 3.2 percent last week, its
highest since early January.
    Palladium        fell 0.1 percent to $876.60 per ounce. 

 (Reporting by Nithin Prasad and Arpan Varghese in Bengaluru;
Editing by Richard Pullin and Joseph Radford)
  
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