* Gold posts largest monthly gain since March, best quarter since Q2 2010
* Price to hold steady ahead of U.S. jobs numbers * Platinum firm; unrest in South Africa continues By Amanda Cooper
LONDON, Oct 1 (Reuters) - Gold steadied just below one-week highs on Monday, after posting its strongest quarterly gain in over two years, and looked set to hold fairly firm ahead of a key U.S. report on employment later this week.
Gold rose by just over 5 percent last month, its largest monthly percentage gain since January's 11-percent increase, while on a quarterly basis, gold gained 10.6 pct for its biggest quarterly rise since the second quarter of 2010.
September is the month in which gold usually posts its largest monthly gains. On average, over the last 43 years, it has risen some 2 percent in September, against an average loss of 0.3 percent in March, the month of its worst performance.
Most of gold's gains in the third quarter were posted in the final five weeks of the quarter, when the price rose by 5.1 percent.
Spot gold was virtually unchanged from Friday's notional close in New York, quoted at $1,770.31 an ounce at 0953 GMT.
Traders and analysts do not expect gold to swing too brusquely in either direction in the near term as investors and consumers adjust to the higher price and as markets await the release of crucial monthly employment figures from the United States on Friday, where policymakers are closely monitoring economic data.
"For the moment, it feels as if the investor market is still not convinced that gold is going to go much higher," Afshin Nabavi, head of trading at MKS Finance said.
"Overall, I still think one has to buy on dips. Everything else, whether it is political or economic, seems to be a shambles ... Investors that missed the boat (at lower price levels) perhaps want to see if we get to $1,800 before they get back in," Nabavi said, adding he expects gold to reach $1,900, just shy of 2011's record high, before the end of this year.
The U.S. Federal Reserve's pledge last month to pump $40 billion in new cash into the financial system every month until the economy generates enough jobs to lower the unemployment rate triggered a swell of investment in precious metals.
Exchange-traded products backed by physical gold took in more metal in September than at any time since March 2011, with an inflow of over 4 million ounces.
On a quarterly basis, in the three months between June and September, ETFs saw net inflows of just over 3.5 million ounces, the biggest rise since the final three months of last year, when they absorbed 4.2 million ounces.
Friday sees the release of the U.S. Labor Department's report on unemployment. A Reuters poll shows economists expect 115,000 workers to have been added to non-farm payrolls in September, following August's 96,000-rise.
STUCK IN A RANGE
"We seem to have established a base now down at $1,740, but we also seem to have a ceiling in place between $1,785 and $1,790," Dave Govett, head of precious metals at Marex-Spectron, said in a note.
"I think it will take some help from other markets to break us one way or the other, as gold does not yet seem to have the appetite to do this by itself. That said, I still favour buying dips in the market and think that before long we will see a renewed assault on $1,800. But in the meantime, trade the ranges and watch the dollar, stocks and oil for short term direction."
European equities edged off three-week lows , led by gains in growth-linked stocks such as miners, while the crude oil price eased after Chinese data showed a slowdown in manufacturing activity in the world's largest commodity consumer.
The euro recovered after hitting a three-week low on Monday as euro zone manufacturing data was not as bad as expected, but uncertainty about when Spain would seek a bailout still undermined the single European currency.
Gold priced in euros fell 0.1 percent on the day to 1,374.75 euros an ounce, just shy of Friday's all-time high at 1,381.15 euros.
The euro price of gold has risen by nearly 14 percent so far this year, slightly outpacing the rise in the dollar price of gold, which has gained 13 percent in this time, set for a twelfth straight yearly increase.
Gold in rupee terms hit a record in mid-September, tempering consumption the world's largest buyer of bullion. Since then, the price of the benchmark rupee-gold future has fallen by more than 4 percent to one-month lows reacting to rupee fluctuations, just as the busiest period for the jewellery market gets underway.
Gold importers in India, the world's biggest buyer, booked the yellow metal in small quantities as traders took advantage of the lowest price levels since late August.
"Demand is there in gold as it is the season, while it is zero for silver," said Haresh Acharya, head of bullion desk at Parker Bullion, in Ahmedabad. The festival season is underway in India and will continue until early December.
In other precious metals, silver
Platinum was down by 0.3 percent at $1,654.99 an ounce.
Platinum has risen by nearly 8 percent in the last month after violent strikes shuttered much production capacity in South Africa, the world's largest miner of the metal.
Palladium was up 0.2 percent at $634.54 an ounce.
(Additional reporting by Siddesh Mayenkar in Mumbai; editing by Keiron Henderson)
Keywords: MARKETS PRECIOUS/