Gold treads water near $1,200 as US dollar, data in focus

SINGAPORE (Reuters) - Gold took a breather on Wednesday after a two-day losing streak but was hovering near its lowest in a week as the dollar held close to 11-year highs, with investors awaiting U.S. economic data and a European Central Bank meeting.

FUNDAMENTALS

* Spot gold was little changed at $1,204.55 an ounce by 0035 GMT. In the previous session, the metal fell to a one-week low of $1,194.90, before paring some losses to close above $1,200.

* The dollar was just below an 11-year high versus a basket of major currencies on Wednesday, boosted by expectations of an increase in U.S. interest rates soon.

* The dollar could take its cues from the U.S. ISM services report due later in the day, which comes ahead of the closely watched U.S. jobs data due on Friday.

* A robust economy could prompt the Federal Reserve to soon hike rates, a move that could hurt non-interest-bearing bullion. A stronger greenback also reduced gold's appeal as a hedge.

* Traders were also keeping an eye on the euro, which has been subdued over the past few sessions ahead of the European Central Bank's policy meeting on Thursday and the implementation of its government bond buying programme due to start this month.

* In a reflection of investor sentiment towards bullion, SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings fell 0.35 percent to 760.80 tonnes on Tuesday. [GOL/ETF]

* Elsewhere, Barclays said it has been providing information to an investigation into precious metals by the U.S. Department of Justice.

* For the top stories on metals and other news, click [TOP/MTL] or [GOL/]

DATA/EVENTS (GMT)

0145 China HSBC services PMI Feb

0850 France Markit services PMI Feb

0855 Germany Markit services PMI Feb

0900 Euro zone Markit services PMI Feb

1315 U.S. ADP national employment Feb

1500 U.S. ISM non-manufacturing PMI Feb

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin)