PRECIOUS-Gold holds steady as investors await key US economic data

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Fed's Daly says further rate cuts will likely be needed

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US Personal Consumption Expenditures index due on Friday

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Gold still very much bullish in longer term, analyst says

(Updates for Asia morning hours)

By Anmol Choubey

Sept 25 (Reuters) - Gold prices held steady on Thursday as investors awaited key U.S. economic data for further insights into Federal Reserve policy, with a slightly weaker dollar lending some support to bullion.

Spot gold was steady at $3,734.04 per ounce, as of 0202 GMT. U.S. gold futures for December delivery were unchanged at $3,765.20.

The U.S. dollar index fell 0.1%, making greenback-priced bullion less expensive for overseas buyers.

San Francisco Federal Reserve Bank President Mary Daly said on Wednesday she "fully supported" the decision by the Fed to cut its policy rate last week and expects further reductions ahead.

"The move may reflect expectations that the Fed intends to run the U.S. economy hot as it rebalances its focus to the labour market," said Ilya Spivak, head of global macro at Tastylive.

"Initial support levels line up around $3,700 and $3,600. Breaking resistance at the latest high near $3,790 might expose $3,870-$3,875, followed by $4,000."

On Tuesday, Fed Chair Jerome Powell emphasised the need to balance inflation risks and a weakening jobs market in upcoming policy decisions.

Investors are awaiting the personal consumption expenditures (PCE) price index report, the Fed's preferred inflation measure, on Friday for further interest rate cues.

The report is expected to show a month-on-month rise of 0.3% for August and 2.7% year-on-year increase, according to a Reuters poll.

"I don't think the inflation data will significantly impact (gold) unless it's exceptionally high," GoldSilver Central MD Brian Lan said.

"In our quantitative view of the market, the longer term is still very much bullish."

Weekly U.S. jobless claims data, due later on Thursday, may provide insights into labour market conditions.

Markets broadly expect two more 25-basis-point Fed rate cuts this year, in October and December.

Safe-haven bullion, which tends to thrive in a low interest rate environment, hit a record high of $3,790.82 on Tuesday.

Spot silver was down 0.2% at $43.83 per ounce, platinum fell 0.1% to $1,470.66 and palladium rose 0.1% to $1,210.96. (Reporting by Anmol Choubey in Bengaluru; Editing by Subhranshu Sahu)