PRECIOUS-Gold holds ground as investors focus on U.S. jobs data

Recasts, adds comment, updates prices

By Arundhati Sarkar

Jan 6 (Reuters) - Gold prices inched higher on Friday after a sharp drop in the previous session, even as the dollar firmed ahead of a closely watched U.S. jobs report that could offer more clarity on the Federal Reserve's interest rate-hike path.

Spot gold XAU= was up 0.1% at $1,834.79 per ounce, as of 1008 GMT, after falling 1.1% on Thursday. Prices have gained about 0.6% so far this week.

U.S. gold futures GCv1 were steady at $1,839.70.

"Gold is probably seeing a little bit of apprehension ahead of the jobs report. It's going to have a big impact on yields, on the dollar and therefore on gold," said Craig Erlam, a senior market analyst at OANDA.

The U.S. Labor Department's payrolls (NFP) data is due at 1330 GMT. Economists polled by Reuters forecast 200,000 jobs were added last month, easing from November's 263,000.

If bullion "prices go below $1,818-$1,820, that would indicate gold is set for a correction after what has been a strong rally since early November," Erlam said.

Weighing on the metal, the dollar index .DXY rose 0.4% against its rivals. USD/

"Higher-than-expected job gains and more persistent wage pressures may be catalysts to add pressure on gold," said IG Market strategist Yeap Jun Rong.

Data released on Thursday showed U.S. private payrolls increased more than expected in December, while the of Americans filing claims for jobless benefits dropped to a three-month low last week, pointing to a still-tight labour market that could force the Fed to keep hiking rates.

Few Fed officials on Thursday reiterated their fight to bring inflation back to the 2% target.

Higher interest rates dim bullion's appeal as an inflation hedge and raise the opportunity cost of holding the -yielding asset.

Spot silver XAG= rose 0.7% to $23.37 per ounce, while platinum XPT= eased 0.1% to $1,049.81, and palladium XPD= edged 0.1% higher to $1,746.77. All three metals were set for weekly falls.

(Reporting by Arundhati Sarkar and Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu)

((Arundhati.Sarkar@thomsonreuters.com; twitter.com/Arundhati_05; +1 646 223 8780 Ext: 2776))