* Gold retreats from 4-week high as dollar recovers
* Largest gold ETF reports biggest inflow since Aug 23
* Gold premiums in India hit $120/oz
(Updates throughout, changes dateline, pvs SINGAPORE)
LONDON, Oct 23 (Reuters) - Gold retreated from four-week highs on Wednesday as a slight recovery in the dollar prompted some investors to cash in gains, with a rally sparked by weaker-than-expected U.S. non-farm payrolls data running out of steam.
The metal rose nearly 2 percent on Tuesday while the dollar index hit eight-month lows and stock markets rallied, after weak U.S. jobs data cemented expectations for the Federal Reserve to keep its stimulus measures in place until next year.
However, those moves went into reverse on Wednesday. The dollar recovered to edge up 0.1 percent, putting some pressure on gold, while European shares broke their nine-day winning streak to fall 0.6 percent.
Spot gold was down 0.6 percent at $1,331.80 an ounce at 0854 GMT, while U.S. gold futures for December delivery were down $10.80 an ounce at $1,331.80. Spot prices hit their highest since Sept 20 on Tuesday at $1,344.46 an ounce.
"As we've seen in the past, some investors are looking for entry points at which to go short, and above 1,330 may be one such level. So we may see some short-positioning coming in, and we might also see some profit-taking based on the moves of the last few days," Mitsubishi analyst Jonathan Butler said.
"This 1,330 level is an important technical point, and so far gold has managed to hold onto it," he said. "A lot of investors are just waiting to see what the next move will be."
Technical analysts -- who study past price patterns to determine the next likely direction of trade -- at Commerzbank say gold's rally on Tuesday had neutralised its bearish view on the metal, although it remains vulnerable to further losses.
"We are technically clearly at a key juncture for the development of the next medium-term trend, which is why we have once again neutralised our forecast," they said in a report.
"As long as the 1,330.17/1,349.31 resistance area -- July, late September and early October highs and the 55-day moving average -- caps on a daily chart closing basis, we will continue to favour the downside."
GOLD ETF REPORTS INFLOW
The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares, reported an inflow of more than 6 tonnes on Tuesday, its biggest one-day inflow in two months. On Monday it reported an outflow of more than 10 tonnes.
Gold premiums in India hit $120 an ounce to London prices on Tuesday as the domestic market failed to get enough supply to meet strong festive demand.
In China, Shanghai spot prices were trading at a premium of $7 an ounce.
Gold demand in China could grow as higher home prices stoked inflation fears, Helen Lau, an analyst at UOB Kay Hian Securities in Hong Kong, said.
Among other precious metals, silver was down 0.2 percent at $22.58 an ounce, having also touched a one-month high on Tuesday at $22.80 an ounce.
The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, fell to its lowest since mid-September on Wednesday at 59.01 as silver outperformed.
Spot platinum was down 0.9 percent at $1,430.99 an ounce, while spot palladium was down 1.1 percent at $742.47 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore; editing by Keiron Henderson)