* U.S. dollar rallies after strong jobs data
* Higher greenback seen pressuring gold prices
* Platinum falls from highest in more than 3 months
(Recasts, updates prices; adds comment, second byline, NEW YORK
dateline)
By Marcy Nicholson and Maytaal Angel
NEW YORK/LONDON, Aug 4 (Reuters) - Gold fell 1 percent on
Friday after better-than-expected U.S. jobs data boosted the
beleaguered dollar and potentially cleared the way for the U.S.
Federal Reserve to raise interest rates for a third time this
year.
U.S. employers hired more workers than expected in July and
raised their hourly earnings by the most in five months, signs
of labor market tightness and offering the Fed some assurance
that inflation will gradually rise to its 2 percent target.
The U.S. dollar , which was wallowing near 15-month
lows prior to the figures, rallied after the release, making
dollar-priced gold costlier for non-U.S investors.
"The strong rise in non-farm payrolls together with the drop
back in the unemployment rate to a joint 16-year low suggests
the Fed will still need to raise rates again later this year,
even if inflation remains subdued," said Simona Gambarini,
commodities economist at Capital Economics.
"In the absence of substantial geopolitical risks, we think
that Fed tightening will prove too strong a headwind for gold
prices this year. We expect the gold price to end the year at
$1,150 per ounce."
Spot gold was down 0.8 percent at $1,257.66 an ounce
by 2:02 p.m. EDT (1802 GMT), after falling 1.1 percent. It was
on track to end the week down 0.9 percent following three
straight weeks higher.
U.S. gold futures for December delivery settled down
0.8 percent at $1,264.60.
"This triggered a sell from safe haven buyers of gold and
silver," said Miguel Perez-Santalla, vice president of Heraeus
Metal Management in New York.
"Though the U.S. dollar's strength weighs on (gold and
silver), the market is still not convinced that this data does
anything to change the Fed's trajectory."
More evidence that the U.S. economy is on a sustainable path
of growth is needed to for the dollar to make a more meaningful
comeback, said Fawad Razaqzada, technical analyst for Forex.com.
Limiting steeper losses in gold was escalating political
turmoil in Washington which has cooled expectations for growth
and inflation, and boosted safe haven assets like the precious
metal. On Tuesday, bullion rose to a seven-week high at
$1,273.90 an ounce.
In other precious metals, silver fell 2 percent to
$16.28 per ounce, having hit a two-week low of $16.17.
Platinum was up 0.1 percent at $961 per ounce, after
hitting its highest since late April at $970.10. It was on track
for its strongest week since early January.
Palladium dipped 0.6 percent to $879.45 per ounce.
(Additional reporting by Nithin Prasad and Arpan Varghese in
Bengaluru; Editing by Toby Davis and Tom Brown)