PRECIOUS-Gold falls from 3-week high as U.S. jobs data boosts dollar

* Robust U.S. jobs data supports Fed rate hike next week
* Specs raise short positions to record high in week to Dec.
1
* Spot platinum falls more than 3.4 percent
* GRAPHIC-2015 asset returns: http://link.reuters.com/dub25t

(Updates prices; adds comment, second byline, NEW YORK
dateline)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, Dec 7 (Reuters) - Gold fell more than 1
percent on Monday from the prior session's three-week high,
after the dollar .DXY was lifted by Friday's upbeat U.S. jobs
data that reinforced expectations that the Federal Reserve will
raise interest rates next week.
A short-covering rally initially swept bullion after the
data on Friday, though robust U.S. data would typically send
gold lower, as it would support the case for a rate increase.
This lifts the opportunity cost of holding non-yielding assets
such as gold.
Spot gold XAU= was down 1.1 percent at $1,074.90 an ounce
at 2:01 p.m. EST (1901) GMT.
U.S. gold futures GCv1 for February delivery settled down
0.8 percent at $1,075.20.
A tumble in crude oil futures LCOc1 CLc1 to a near
seven-year low also pressured gold prices, traders said. O/R
Gold prices have fallen 9 percent so far this year, largely
on the back of expectations that U.S. interest rates are set to
rise for the first time in nearly a decade. The focus remains
very much on next week's U.S. central bank meeting.
"Most people have been looking at the potential for a rate
hike in the U.S. and pretty much that alone, ignoring all other
news," Simon Weeks, head of precious metals at the Bank of Nova
Scotia, said, adding: "There must have been people who were
caught short on Friday."
Hedge funds and money managers raised their net short
position in COMEX gold futures and options to the biggest since
records became publicly available in 2006, data showed late
Friday.
"Given last week's rally, many of these shorts have likely
been lifted, and we expect both gross shorts to come down and
net length to pick up next week," Citi Research said in a note.
"We expect that technical upside pressure will be subdued
into year-end while macro conditions remain skewed to the
downside."
With U.S. interest rates set to rise, the wider environment
remains unfriendly for gold, analysts said.
"We remain bearish and lower our 12-month price target to
$1,000 per ounce," Julius Baer said in a note on Monday.
More supportively, central bank data from China, which
according to Reuters calculations showed the country probably
added nearly 21 tonnes of gold to its reserves in November, also
pointed towards some support for the metal.
Spot platinum XPT= made the biggest fall among precious
metals, dropping as much as 3.4 percent to $849.50 an ounce.
Silver XAG= was down 1.4 percent at $14.35 an ounce and
palladium XPD= was down 2.3 percent at $550.65 an ounce.

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