PRECIOUS-Gold rises the most in seven sessions, China data helps
* Gold extends rebound into second day
* Inflation, bargain-hunting stoke buying in China
* China June consumer inflation up more than expected
(Adds comment, updates prices) SINGAPORE, July 9 (Reuters) - Gold rose the most in seven sessions on Tuesday, after breaking through a key technical level and as China inflation data boosted its appeal as a hedge against rising prices in the world's second-biggest buyer of the metal. Bullion, down nearly 30 percent for the year, came under renewed pressure late last week as a strong U.S. jobs report raised fears of an early end to the U.S. Federal Reserve's bond buying which has been seen as stoking inflation. But it has now extended gains into a second day, as the dollar eased from three-year highs and on some bargain-hunting. Data on Tuesday that showed China's annual consumer inflation accelerated more than expected in June also helped.
"The increase in Chinese inflation rates could see further appreciation around gold demand in China, which already appears to be persisting at elevated levels versus 2012," Nomura analysts wrote in a note. "Rising inflation should hamper significant easing responses which should see this trend for enhanced Chinese gold demand continue." Spot gold had risen 1.5 percent to $1,254.91 an ounce rose nearly $20 to $1,253.40. Traders also attributed some of Tuesday's gains to technical buying once prices crossed $1,245 -- the level at which gold stood before nonfarm payroll data came out last Friday. Bullion has fallen nearly 10 percent since Fed Chairman Ben Bernanke said last month the economy was recovering strongly enough for the U.S. central bank's $85 billion monthly bond-buying stimulus to be reduced as soon as later this year. Gold for immediate delivery fell to $1,180.71 on June 28 to its lowest since August 2010. Despite the rebound, gold continues to be undermined by liquidation in metal-backed exchange traded funds. SPDR Gold Trust, the world's largest gold ETF, said its holdings fell 1.56 percent to 946.96 tonnes on Monday - the lowest since February 2009. "The unwound gold positions increase gold supply and put gold under downward pressure, which in turn triggers more liquidations. We expect the spiral of liquidation to extend to 2014," said Helen Lau, senior metals and mining analyst at UOB Kay Hian Research. Lau expects gold prices to decline by 20 percent year-on-year to $1,332 in 2013, and another 10 percent in 2014.
Precious metals prices 0728 GMT
Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1254.91 19.02 +1.54 -25.06 Spot Silver 19.33 0.29 +1.52 -36.16 Spot Platinum 1366.99 8.99 +0.66 -10.95 Spot Palladium 703.00 8.00 +1.15 1.59 COMEX GOLD AUG3 1253.40 18.50 +1.50 -25.21 42167 COMEX SILVER SEP3 19.33 0.29 +1.51 -36.23 8763 Euro/Dollar 1.2885 Dollar/Yen 101.12
COMEX gold and silver contracts show the most active months
(Editing by Muralikumar Anantharaman and Joseph Radford)