By A. Ananthalakshmi
SINGAPORE (Reuters) - Gold was steady on Thursday as investors awaited U.S. data for possible cues, but sentiment remained fragile as optimism over an economic recovery and a strong dollar dented bullion's appeal as a hedge.
More outflows from bullion-backed exchange-traded funds indicated that investors anticipate further price falls as the dollar stays close to a four-year peak.
Spot gold was flat at $1,161.32 an ounce at 0344 GMT, after easing 0.3 percent the session before.
The metal has seen an intense sell-off since Oct. 31, sliding below the key technical level of $1,180 and then plumbing a 4-1/2-year low at $1,131.85. It has since recovered modestly on short-covering.
"I think the market will consolidate at this level, we could go up a bit but not far," said a trader in Shanghai. "The support at $1,180 has become a key resistance level. It has been a quiet week on the data side, but today's U.S. data could provide some trigger."
U.S. weekly jobless claims are expected later in the day, and could provide clues about the strength of the economy. The recovery is being closely tracked as it would influence the U.S. Federal Reserve's decision to increase interest rates.
Higher rates could hurt non-interest-bearing gold and boost the dollar. Bullion, seen as an alternative investment to riskier assets during economic uncertainty, tends to fall when the dollar and equities are strong.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.25 percent to 722.67 tonnes on Wednesday - the seventh straight day of declines.
The holdings are also the lowest in six years. The ETF is seen as a good reflection of market sentiment due to its size.
Bullion traders were also paying close attention to oil markets. Brent crude traded around $80 a barrel on Thursday, near its lowest since 2010, after OPEC said demand for its oil would fall next year and Saudi Arabia remained silent about a possible cut in production.
(Reporting by A. Ananthalakshmi; Editing by Joseph Radford and Tom Hogue)
