* Bullion on track for 2nd straight weekly fall
* Gold looks neutral in range of $1,303-$1,318 -technicals
* SPDR Holdings drop for third straight session
* Platinum off 2-mth lows, palladium off 6-wk lows
(Adds comment, updates prices)
By Sethuraman N R
Sept 2 Gold traded in a narrow range on Friday
after touching its lowest in over two months the session before,
with the dollar volatile after weak U.S. manufacturing data
raised doubts on the economy's strength ahead of closely-watched
Spot gold had eased 0.3 percent to $1,310.23 per
ounce by 0706 GMT. The metal on Thursday hit its lowest since
June 24 at $1,301.91 and was on track for its second straight
U.S. gold futures edged down to $1,317.50.
"(The Federal Reserve head's) comments from last week have
put pressure on gold and we need to see the jobs data, which is
likely going to be really good," said Ronald Leung, chief dealer
at Lee Cheong Gold Dealers in Hong Kong.
U.S. factory activity contracted in August for the first
time in six months as new orders and production tumbled, but a
low level of layoffs continued to point to a pickup in economic
growth in the third quarter.
Other U.S. data showed initial claims for state unemployment
benefits rose less than expected last week, pointing to
sustained labour market strength.
An upbeat nonfarm payrolls report on Friday would reinforce
the view that a U.S. rate hike may be on the cards, after Fed
officials sounded a hawkish note at a meeting last weekend.
"A good jobs number could generate enough concern over a
near-term rate rise to bolster the dollar and undercut gold,"
HSBC analyst James Steel said in a note.
There will very likely be an aggressive sell-off if prices
breach the $1,300-level, Alex Thorndike, senior precious metals
dealer with MKS PAMP Group said.
"Longer term, however, we feel that it may prove an
attractive opportunity to buy if we do shoot lower, with a
number of investors who missed the post-Brexit move looking to
get into the metal."
The dollar index, which measures the greenback
against a basket of currencies, rose 0.1 percent to 95.751
Spot gold looks neutral in a range of $1,303-$1,318 per
ounce, and an escape could suggest a direction, according to
Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, fell for a third straight
session. Holdings dropped 0.57 percent to 937.89 tonnes on
Spot silver was almost unchanged at $18.84 an ounce.
Platinum was nearly flat at $1,041.70. It earlier
touched its lowest since July 1 at $1,035.15. Platinum was
heading for its fourth straight weekly loss.
Palladium rose 0.3 percent to $665.43, after falling
to a six-week low of $654.72.
(Reporting By Nallur Sethuraman in Bengaluru; Editing by Joseph