* Gold prices head for second weekly loss
* China closed for holidays, Indian demand soft
* GRAPHIC-Asset returns: http://link.reuters.com/dub25t
(Adds comment, byline, NEW YORK dateline; updates prices)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, Sept 4 (Reuters) - Gold prices fell towards
a second weekly loss on Friday after U.S. payrolls data failed
to allay uncertainty over the prospect of a near-term interest
rate hike from the Federal Reserve.
Data from the Labor Department on Friday showed that
non-farm payrolls rose 173,000 last month, a slowdown from
July's upwardly revised gain of 245,000. ID:nL1N11925M
However, a drop in the unemployment rate to a near
7-1/2-year low and an acceleration in wages kept alive prospects
of a Federal Reserve interest rate increase later this month.
Spot gold XAU= was down 0.4 percent at $1,120.80 an ounce
at 2:49 p.m. EDT (1849 GMT), while U.S. gold futures GCZ5 for
December delivery settled down 0.3 percent at $1,121.40. The
metal is on track to fall for a second week.
"Overall I think the payrolls were erring on the better
side, even though the headline number was weaker, because of the
lower unemployment rate, the higher hourly earnings, and the
upward revisions," ABN Amro analyst Georgette Boele said.
A top Federal Reserve policymaker said the data on the U.S.
jobs market was "good" and did not change the outlook for
monetary policy. ID:nW1N0ZB01U
Global equity markets tumbled and the dollar was mixed after
the data. MKTS/GLOB
Gold has come under pressure this year from expectations the
Fed will hike rates for the first time in nearly a decade.
The Fed has already indicated that the timing of a hike is
largely data-dependent.
The absence of Chinese buyers also weighed on gold, with
markets in the major bullion consumer closed for public
holidays. Monday will be a U.S. holiday. ID:nL1N11A0Y7
Gold prices in India swung to a discount to the global
benchmark this week for the first time since mid-July.
ID:nL4N11A1A0
"Although August bullion imports were high, demand in India
appears to have stalled," HSBC said in a note.
Capital Economics noted that weddings and festivals are
viewed as auspicious times to buy gold in India.
"According to the Hindu calendar, the number of days ...
considered propitious to get married is 30 percent lower in 2015
than in 2014," it said.
"Gold demand should recover in Q3 ahead of the big wedding
and festival season in Q4."
In Australia, gold coin and minted bar sales at the Perth
Mint dipped in August. ID:nL4N11A0GK
Among other precious metals, silver XAG= was down 1.8
percent at $14.51 an ounce. Platinum XPT= was down 1.3 percent
at $987.74 an ounce, while palladium XPD= gained 0.8 percent
at $577.50 an ounce.