July 28, 2014 / 10:56 AM / 6 years ago

PRECIOUS-Gold little changed, awaiting Fed meeting and U.S. jobs data

* Eyes on Fed meeting outcome on Wednesday, Friday’s payroll

* Dollar near 6-month high, capping gold’s potential rebound

* Ukraine-Russia tensions, Israel-Palestine cut gold’s losses (Updates to U.S. session; adds new trader comment, close in gold futures, NEW YORK to dateline, new byline)

By Barani Krishnan and Clara Denina

NEW YORK/LONDON, July 28 (Reuters) - Gold was little changed on Monday as traders and investors awaited the outcome of a Federal Reserve policy meeting, while hazarding a guess on what U.S. jobs numbers for the month might be.

The dollar hovered near multi-month highs, capping any potential rise in the yellow metal even as heightened tensions between the West and Russia and continued violence in the Middle East kept safe-haven assets in focus.

“There was some technical selling early in the day, otherwise it was choppy and quiet,” said James Steel, metals analyst and senior vice-president at HSBC in New York. “I think everybody’s looking towards the FOMC and the unemployment data.”

The FOMC, or the Fed’s Federal Open Market Committee, could drop subtle clues on the timing for a tightening in U.S. interest rates when it issues its statement on Wednesday after a two-day meeting.

Higher interest rates would be negative for gold as they encourage investors to switch to assets that, unlike bullion, pay interest.

U.S. second-quarter GDP data, due on Wednesday, and July non-farm payrolls, or job numbers, due on Friday, are other indicators on when interest rates could rise.

Gold hit a five-week low below $1,300 an ounce on Thursday on speculation that U.S. job gains so far this year could accelerate the need for higher interest rates. Fed Chair Janet Yellen said earlier this month the central bank might raise rates sooner than expected if labor growth remained robust.

In Monday’s session, the spot price of bullion was down 0.2 percent at $1,304.96 an ounce by 4:05 p.m. EDT (2005 GMT).

U.S. gold futures most-active contract, for delivery in August, settled flat at $1,303.30 an ounce.

The market cut some of its early losses after additional European sanctions on Moscow boosted gold’s safe-haven standing. Clashes between Ukrainian troops and pro-Russian rebels and fighting between Hamas and Israel also encouraged some investors to stay in gold.

“Gold should stay supported between $1,285 and $1,300 until Friday...and depending on what happens there (with the job numbers), it could actually then push lower again,” Standard Bank analyst Walter de Wet said.

Among other precious metals, spot silver fell half a percent to $20.57 an ounce, having touched its lowest since June 19 at $20.26 on Thursday.

Spot platinum gained almost 1 percent to $1,483.75 an ounce, while spot palladium rose 0.2 percent to $877.50.

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