PRECIOUS-Gold steadies as China's yuan holds gains vs dollar

    * Gains in dollar index limit upside for gold
    * Gold seen in holding pattern until more data emerges

 (Updates prices, headline; adds comment, byline, CHICAGO
previous dateline LONDON)
    By Renita D. Young and Maytaal Angel
    CHICAGO/LONDON, Aug 9 (Reuters) - Gold was near flat on
Thursday after two straight sessions of gains as a stronger U.S.
dollar index weighed on upside momentum, though the precious
metal took some comfort from a steadier Chinese currency.
    Gold has been highly correlated with the yuan in recent
weeks, with the Chinese currency acting as a proxy for concerns
about U.S.-China trade tensions.
    The yuan steadied against the dollar            as greenback
bulls remained wary of potential policy moves to stabilize the
Chinese currency.      
    The dollar rose against a basket of major currencies as
geopolitical tensions faded, though traders said the greenback
needed fresh impetus or an escalation in trade tensions to move
    A strong dollar makes dollar-priced gold costlier for
non-U.S investors.
    "Right now, gold is in a holding pattern until you get a
little bit more of data," said Josh Graves, senior commodities
strategist at RJO Futures.
    He noted U.S. jobless claims came in lower than expected in
the latest week, signifying a stronger economy and little
necessity for safe-haven bids, like non-yielding gold.
    U.S. Consumer Price Index figures, which gauge inflation on
consumer expenses, are expected early on Friday.
    Spot gold        was flat at $1,213.05 per ounce by 1:35
p.m. EDT (1735 GMT). U.S. gold futures         for December
delivery settled down $1.10, or 0.1 percent, at $1,219.90 per
    "We still think (gold) will move higher in the second half
because the dollar will weaken a bit, the Chinese government is
trying to stop the yuan (from) weakening, and we'll have more
concerns over trade," said Bank of America-Merrill Lynch analyst
Michael Widmer.
    China said late on Wednesday it would slap retaliatory
tariffs of 25 percent on $16 billion worth of U.S. imports.
    Washington said it would impose fresh sanctions on Russia
after it determined Moscow used a nerve agent against a former
Russian agent and his daughter in Britain.             
    Gold, a traditional safe haven, has largely failed to
benefit from rising geopolitical tensions this year, as
investors have chosen the safety of the dollar over the precious
    The Federal Reserve has raised U.S. interest rates twice
this year and has targeted two more hikes. Higher U.S. rates
tend to boost the dollar and Treasury yields, adding pressure on
greenback-denominated, non-yielding bullion.
    Silver        rose 0.4 percent to $15.45 an ounce, while
platinum        was unchanged at $826.50. Both earlier hit
six-day highs at $15.51 and $839.90, respectively.
    Palladium        increased 0.7 percent to $906 per ounce,
after hitting a more than two-week low in the previous session.

 (Additional reporting by Apeksha Nair in Bengaluru; editing by
David Evans, G Crosse)