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PRECIOUS-Gold up 1.4 pct on Ukraine, US jobs data has mixed impact

* More violence in Ukraine; rising tensions feared

* Nonfarm payrolls beat consensus but participation down

* US equities down as funds retreat to bond sector

* Coming up: U.S. ISM service-sector index Monday

(Adds comment, details from US job report, updates market activities)

NEW YORK/LONDON, May 2 (Reuters) - Gold rose more than 1 percent on Friday, its biggest daily gain in two months, as rising geopolitical tensions and heavy short-covering helped bullion reverse an initial sharp sell-off after mixed U.S. job data.

Bullion rallied on fears of more violence after news that several men were shot dead in clashes between pro-Russian protesters and Ukraine supporters and dozens of people killed in a fire in the trade union building in the largely Russian-speaking port city of Odessa.

Traders said gold's ability to hold above key technical support at $1,275 an ounce set the stage for reversing initial heavy losses that followed data showing U.S. job growth had increased in April at its fastest pace in more than two years.

Gold also benefited as early gains on Wall Street faded and investors retreated to long-dated government debt as enthusiasm over strong headline U.S. jobs growth was undercut by flat wages and a decline in the number of people looking for work.

"Going into the long weekend with London out on Monday, there was short-covering and good physical buying after a knee-jerk selloff earlier after the job data," said Thomas Capalbo, precious metals trader at brokerage Newedge.

The London gold market will be shut on Monday for the May bank holiday.

Spot gold was up 1.4 percent at $1,300.90 an ounce by 2:23 p.m. EDT (1823 GMT), after rising to $1,304.90.

Last week, gold briefly fell to a three-month low under $1,270 an ounce on economic optimism and a lack of safe-haven buying.

U.S. COMEX gold futures for June delivery gained $18.80 to $1,302.20 an ounce. Trading volume was about 170,000 lots, about 35 percent above its third-day average, preliminary Reuters data showed.

Earlier, it tumbled to a one-week low of $1,276.60 an ounce after the U.S. government said non-farm payrolls showed the economy added 288,000 jobs in April, easily beating consensus forecasts and marking the largest gain since January 2012.

The brightening outlook was, however, tempered somewhat by a sharp increase in the number of people dropping out of the labor force, which pushed the unemployment rate to a 5-1/2 year low of 6.3 percent. Wage growth also was stagnant.

Investors initially sold the metal on the job growth headline but later bought back more positions as they switched their focus on the lower labor force participation rate, said Miguel Perez-Santalla, vice president at precious metals market BullionVault.

Gold was also underpinned by falling Treasury yields, with the U.S. 30-year bond yields dropping to the lowest in more than 10 months.

Investor sentiment remains weak, however, as holdings in the SPDR Gold Trust dropped 2.39 tonnes to 785.55 tonnes on Thursday, after losing 4.19 tonnes on Wednesday. The fund saw an outflow of 25 tonnes in April, the first monthly outflow after two months of inflows and worst since December.

Silver outperformed gold, rising 2.6 percent to $19.49 an ounce. Platinum rose 1.1 percent to $1,433.75, while palladium eased 0.1 percent to $808.97.

2:23 PM EST LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold JUN 1302.90 19.50 1.5 1272.00 1304.90 159,240 US Silver MAY 19.492 0.503 2.6 18.865 19.600 198 US Plat JUL 1440.70 13.20 0.9 1418.20 1445.00 9,715 US Pall JUN 812.40 -1.75 -0.2 808.10 819.20 5,389 Gold 1300.90 17.41 1.4 1277.10 1304.40 Silver 19.490 0.490 2.6 18.920 19.640 Platinum 1433.75 16.15 1.1 1419.00 1441.50 Palladium 808.97 -0.63 -0.1 809.50 817.00 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 166,265 125,787 180,403 15.02 -0.25 US Silver 51,832 64,617 55,999 22.79 0.37 US Platinum 9,840 8,792 12,491 15.33 -0.92 US Palladium 5,764 5,501 5,668 25.12 -0.95

(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Jason Neely, Jane Baird, Lisa Von Ahn and Chizu Nomiyama)