PRECIOUS-Gold slips as traders await US jobs data, monitor Mideast tensions

Updates prices

By Ashitha Shivaprasad

Sept 1 (Reuters) - Gold slipped on Tuesday as traders assessed Middle East tensions and awaited key U.S. labour market data due this week that could shape expectations for Federal Reserve monetary policy.

Spot gold XAU= was down 0.4% at $4,430.78 per ounce by 0701 GMT, after hitting its lowest since August 19 in the previous session.

U.S. gold futures GCcv1 edged 0.1% lower to $4,479.30.

Key U.S. data due this week include job openings, the ADP employment report and nonfarm payrolls, which investors will watch for signs of labour market strength and clues on the interest rate outlook.

Last week, spot gold scaled its highest in more than three months before tumbling 3% on Friday after Fed Chair Kevin Warsh said the central bank will "have work to do" if policymakers don't get the confidence they need that inflation is heading down to 2%.

Gold has been pressured by "Warsh's hawkish Jackson Hole speech, plus fresh tensions in the Strait of Hormuz, which has brought with it higher oil prices and raised inflationary expectations," IG market analyst Tony Sycamore said.

"One hike in isolation should not be a game changer for gold. Two or three might be," he said.

Traders see a 66% chance of a U.S. rate hike in September and an 89% probability in December, according to the CME FedWatch Tool.

While gold is considered a hedge against inflation, higher rates typically weigh on the metal by boosting the appeal of yield-bearing assets.

U.S. President Donald Trump told reporters in the Oval Office that he has a lot of respect for Warsh and that "he'll do what he has to do" on rates.

Trump threatened further strikes against Iran on Monday after the first exchange of direct attacks in a month, raising tensions in a conflict that had recently shifted into an economic standoff. Oil prices rose for a second straight session. O/R

Among other metals, spot silver XAG= fell 0.1% to $66.47, platinum XPT= edged 0.9% higher to $1,807.58, while palladium XPD= fell 0.2% to $1,354.09.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Sherry Jacob-Phillips, Ronojoy Mazumdar and Subhranshu Sahu)

((Ashitha.Shivaprasad@thomsonreuters.com;))