PRECIOUS-Gold firms on subdued dollar, stronger U.S. jobs data caps gains

* U.S. weekly jobless claims near 18-month low

* ECB takes token step towards dialling down pandemic-era stimulus

* Gold briefly touches $1,800/oz mark (Updates prices)

By Arundhati Sarkar

Sept 9 (Reuters) - Gold steadied in choppy trading on Thursday, buoyed by a slight retreat in the dollar, but renewed bets the Federal Reserve may start early tapering of economic support capped gains, with the ECB also slowing its bond buying.

Spot gold was up 0.2% at $1,791.53 per ounce by 11:30 am EDT (1530 GMT), after briefly hitting $1,800.69 earlier in the session.

U.S. gold futures fell 0.1% to $1,792.40.

Making gold cheaper for holders of other currencies, the dollar edged down, while the euro extended modest gains after the European Central Bank said it would slow the pace of bond buying under its emergency scheme.

But the U.S. weekly jobless claims came in near 18-month lows, "which cements the belief that a December (Fed) taper announcement was possible ... So gold prices are going to consolidate around these levels," said Ed Moya, senior market analyst at foreign exchange brokerage OANDA.

The increased likelihood that the ECB may start reducing stimulus at some point next year drove gold's initial decline back below $1,800, Moya added.

Initial claims for state unemployment benefits in the U.S. dropped 35,000 to a seasonally adjusted 310,000 for the week ended Sept. 4, the lowest level since mid-March 2020.

Gold tends to gain when interest rates are low, while some investors also view bullion as a hedge against higher inflation that could follow stimulus measures.

Meanwhile, the Fed reported on Wednesday that the U.S. economy "downshifted slightly" in August in the face of a renewed COVID-19 surge.

StoneX analyst Rhona O'Connell said, "overall uncertainty is keeping gold supported, while the longer term element underpinning prices is the prevalence of negative real rates."

"The Delta (coronavirus) variant is obviously still muddying the waters," she added.

Elsewhere, silver rose 0.4% to $24.05 per ounce, platinum gained 0.1% to $980.74, while palladium fell 0.7% to $2,235.27. (Reporting by Arundhati Sarkar in Bengaluru; Editing by Elaine Hardcastle and David Evans)

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