×

PRECIOUS-Gold steady, but Fed rate hike concerns weigh

* Dollar hits highest in nearly 8 months vs yen

* Speculators cut bullish COMEX gold bets for seventh week

* GRAPHIC-2017 asset returns: http://tmsnrt.rs/2jvdmXl

(Updates prices, adds quotes) Nov 6 (Reuters) - Gold held steady on Monday, but hovered near a one-week low hit in the previous session, as largely upbeat U.S. economic data reinforced the prospects of another rate hike by the Federal Reserve next month.

Spot gold was nearly unchanged at $1,269.11 per ounce

as of 0409 GMT after edging lower earlier in the session. On Friday, the precious metal touched a one-week low of $1,265.16.

U.S. gold futures for December delivery gained 0.1

percent to $1,269.80. U.S. jobs growth accelerated in October, although wage growth was tepid, adding to the Fed's assessment last week that "the labor market has continued to strengthen," with the sluggish wage data doing little to change expectations.

Markets are increasingly confident the Fed will hike interest rates in December, which has weighed on the precious metals complex, said Jordan Eliseo, chief economist at gold trader ABC Bullion. Traders see a 90.2 percent chance of a rate hike at the central bank's next meeting, according to Thomson Reuters data.

Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. "The strengthening of the dollar due to strong U.S. data has kept gold prices in check. The movement has been quite consistent trading within $1,275 an ounce range," said Brian Lan, managing director at dealer GoldSilver Central in Singapore. The dollar touched its highest level in nearly eight months versus the yen on Monday.

The dollar index , which measures the greenback

against a basket of six major currencies, last stood at 94.938, trading within sight of an Oct. 27 peak at 95.150, a more than three-month high. "Gold seems to have found some safe haven support after the initial sell-off as the street nervously watches developments in Saudi Arabia...," said Jeffrey Halley, a senior market analyst with OANDA. Saudi Arabia's future king tightened his grip on power over the weekend through an anti-corruption purge by arresting some members of the kingdom's political and business elite.

Analysts said the yellow metal could also find support after U.S. President Donald Trump, who kicked off a 12-day Asia trip, looked to present a united front with Japan against North Korea.

Meanwhile, holdings in SPDR Gold Trust , the world's

largest gold-backed exchange-traded fund, fell 0.03 percent to 845.75 tonnes on Friday. Hedge funds and money managers reduced their net long position in COMEX gold contracts for the seventh straight week, in the week to Oct. 31, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.

Among other precious metals, spot silver inched 0.2 percent higher to $16.84 an ounce, platinum rose 0.4 percent to $921.80, while palladium was up 0.1 percent at

$998.20.

(Reporting by Vijaykumar Vedala in Bengaluru; Editing by Richard Pullin and Biju Dwarakanath)