PRECIOUS-Gold erases losses after ceasefire hopes emerge; strong US jobs data caps gains

(Recasts for US market open)

* Trump says Israel and Iran 'looking to do an immediate ceasefire'

* US economy added 172,000 jobs last month, says report

* Gold hits a session low of $4,268.39

* US CPI data due on Wednesday, US PPI data due on Thursday

By Anushree Mukherjee

June 8 (Reuters) - Gold steadied on Monday as prospects for a potential Israel-Iran ceasefire helped the metal rebound from session lows, though strong U.S. jobs data boosted expectations of a Federal Reserve rate hike and limited the upside.

Spot gold was steady at $4,330.98 per ounce by 9:27 a.m. ET (1327 GMT), after hitting its lowest level since March 23 earlier in the session at $4,268.39.

U.S. gold futures for August delivery were down 0.2% at $4,355.60. U.S. President Donald Trump said on Monday that both Israel and Iranwere looking to "do an immediate ceasefire" and that final negotiations on "peace" were proceeding.

"We rebounded off the overseas lows just on news that perhaps there's a new ceasefire between Iran and Israel. So that's taken a little bit of pressure off the downside," said Peter Grant, vice president and senior metals strategist at Zaner Metals. While gold is traditionally sought as a safe haven during conflict, a peace deal would reduce energy-driven inflation risks and ease the pressure on central banks to keep interest rates high. Higher interest rates tend to weigh on non-yielding gold. Limiting the upside for gold prices, the dollar traded around its highest level in nearly two months after a stronger-than-expected jobs report last week boosted expectations for a year-end interest rate hike.

A stronger dollar makes greenback-priced commodities more expensive for other currency-holders. Traders are now pricing in a 43% chance of a quarter-point rate hike in December, up from just about 14% a month ago, according to the CME Group's FedWatch tool.

Investors now await U.S. Consumer Price Index (CPI) data on Wednesday and Producer Price Index (PPI) data on Thursday for further clues on the Federal Reserve's interest rate path.

"Gold may next test the psychologically-important $4,000 line for critical support if markets receive hotter-than-expected CPI prints this week, or a decidedly hawkish FOMC next week," said Han Tan, chief market analyst at Bybit.

Spot silver was up 0.9% at $68.44 per ounce, platinum lost 1.1% to reach $1,757.15, while palladium fell 0.9% to $1,215.25. (Reporting by Anushree Mukherjee and Noel John in Bengaluru; Editing by Jonathan Ananda)