PRECIOUS-Gold dips as US jobs data cements bets for smaller rate cut

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US CPI, PPI data due later this week

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Israel bombed targets in Lebanon and Gaza Strip on Sunday

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China cenbank pauses gold purchases for 5th month in Sept

(Adds comment, graphic and updates prices)

By Ashitha Shivaprasad

Oct 7 (Reuters) - Gold prices eased on Monday as bets firmed for a smaller U.S. rate cut in November after strong jobs data, while investors awaited inflation data and comments from Federal Reserve officials for further cues.

Spot gold slipped 0.2% to $2,647.49 per ounce by 0432 GMT. U.S. gold futures were unchanged at $2,667.10.

The stronger-than-expected September jobs report, released on Friday, poured cold water on expectations of a large Fed rate cut next month, boosting the dollar.

Traders now see a 98% probability that the Fed will cut rates by only a quarter of a percentage point next month.

"Geopolitical risks in the Middle East could support safe-haven flows for the yellow metal, which limit the downside from a less-dovish market rate pricing," IG market strategist Yeap Jun Rong said.

Bullion tends to be a preferred investment in a low interest rate environment and during political and economic uncertainties.

This week, market participants will focus on minutes of the Fed's last policy meeting, and the U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) data. A slew of U.S. central bank officials are also speaking this week.

In the Middle East, Israel bombed Hezbollah targets in Lebanon and the Gaza Strip on Sunday ahead of the one-year anniversary of the Oct. 7 attacks that sparked its war.

Elsewhere, China's central bank held back on buying gold for its reserves for a fifth straight month in September.

With gold prices near record highs, China may hold back on further accumulation in the short-term but the broader trend to load up on the metal could continue due to its sensitive relations with the West and a desire to diversify away from the U.S. dollar, Yeap said.

Spot silver fell 0.2% to $32.11, platinum lost 0.4% to $983.67 and palladium rose 0.6% to $1,017.63.

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