PRECIOUS-Gold erases losses despite strong US jobs data as ceasefire hopes emerge

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

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

* Gold hit a session low of $4,268.39

* US CPI data due on Wednesday, US PPI data due on Thursday (Updates with settlement price)

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 $4,334.22 per ounce by 1:42 p.m. ET (1742 GMT), after hitting its lowest level since March 23 earlier in the session.

U.S. gold futures for August delivery settled little changed at $4,363.4.

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.

Citi cut its near-term gold price target to $4,000 per ounce from $4,300 on expectations of higher U.S. interest rates this year due to the Strait of Hormuz impasse and high energy prices.

Spot silver was up 0.6% at $68.22 per ounce, platinum lost 1.6% to reach $1,747.76, while palladium fell 1.7% to $1,205.73. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Jonathan Ananda, Sahal Muhammed and Diti Pujara)