PRECIOUS-Gold dips after upbeat U.S. payrolls data

    * U.S. economy adds 223,000 jobs in May, beating forecasts
    * Dollar jumps as data shores up U.S. rate hike view
    * GRAPHIC-2018 asset returns:

 (Updates prices, headline; adds comment, second byline, NEW
YORK to dateline)
    By Renita D. Young and Jan Harvey
    NEW YORK/LONDON, June 1 (Reuters) - Gold fell on Friday
after stronger than forecast U.S. payrolls data boosted
expectations that the Federal Reserve will press ahead with
another U.S. interest rate hike this month, lifting the dollar.
    The metal is highly sensitive to rising rates, which
increase the opportunity cost of holding non-yielding bullion,
while boosting the dollar, in which it is priced. 
    Spot gold        lost 0.2 percent at $1,295.19 by 1:32 p.m.
EDT (1732 GMT), earlier peaking above $1,300 an ounce. U.S. gold
futures         for August delivery settled down $5.40, or 0.4
percent, at $1,299.3 per ounce. 
    Spot gold is poised to close the week about 0.5 percent
    "Treasuries are up, the dollar ticked back up and there's no
geopolitical news really supportive of gold at the moment," said
Philip Streible, senior market strategist at RJO Futures.
    The dollar rose against the euro and Treasury yields hit
session highs after the payrolls report showed the U.S. economy
added 223,000 jobs last month, well ahead of expectations for
188,000 jobs. Wages rose solidly, cementing expectations that
the Federal Reserve will raise interest rates this month.            
    While the euro failed to sustain gains it made earlier
against the dollar after the apparent end of a political crisis
in Italy that had rattled markets this week, world stocks stayed
in the black as investors welcomed the Italian deal.            
    However, investors remain concerned over a trade stand-off
between the United States and its trading partners, which
deepened on Thursday after the U.S. proceeded with tariffs on
aluminum and steel imports.             
    While a worsening global trade situation could benefit gold
if it curbs appetite for assets seen as higher risk, it is not
yet offsetting the negative impact of an expected increase in
rates, and the effects of that on the dollar. 
    "Prices continue to follow the U.S. dollar, leaving gold in
'currency mode' rather than 'commodity mode'," Julius Baer said
in a note.
    Meanwhile, U.S. interest rates remain in focus, said Capital
Economics analyst Simona Gambarini.
    "Investors are waiting to see whether the Fed will hike
rates again, and what their take on inflation and those risks in
Europe and with trade will be."
    Spot silver        increased 0.4 percent at $16.42 an ounce,
but headed for a 0.5 percent weekly decline.
    Platinum        gained 0.3 percent at $903.90 an ounce,
earlier hitting $1,005.40, a 10-day high and heading for a 0.4
percent weekly rise. Palladium        rose 1.9 percent at
$1,003.90 per ounce, poised for a 2.3 percent increase on the

 (Additional reporting by Karen Rodrigues in Bengaluru
Editing by David Evans and Tom Brown)