Gold eases as firmer dollar counters bets of Fed pause

June 5 (Reuters) - Gold prices edged lower on Monday as the dollar firmed on strong U.S. payrolls report, offsetting support from the prospects that the Federal Reserve would pause its rate hikes this month.

FUNDAMENTALS

* Spot gold was down 0.1% at $1,945.66 per ounce, as of 0041 GMT. U.S. gold futures fell 0.3% to $1,963.10.

* The dollar index rose 0.2%, making greenback-priced bullion less affordable for overseas buyers.

* Gold prices slipped more than 1% on Friday after data showed U.S. nonfarm payrolls rose by 339,000 jobs last month, much higher than an increase of 190,000 forecast by economists polled by Reuters. But the unemployment rate surged to a seven-month high of 3.7%.

* The higher unemployment reading prompted markets to price in a 78.7% chance of the U.S. Fed leaving interest rates unchanged at the June 13-14 meeting, according to the CME FedWatch Tool.

* Non-interest-bearing bullion tends to become less attractive in a high interest rate environment.

* Asian shares on Monday extended a global rally on optimism that the Fed would pause its rate hikes this month, while oil jumped as Saudi Arabia plegded big output cuts in July.

* Physical gold demand slowed in India last week as a recovery in domestic prices prompted buyers to postpone purchases, while weakening of the Chinese currency underpinned premiums in the top consumer.

* Spot silver was down 0.1% at $23.57 per ounce, platinum was flat at $1,003.69 per ounce, while palladium eased 0.1% to $1,418.45.

DATA/EVENTS (GMT) 0145 China Caixin Services PMI May 0500 India S&P Global Services PMI May 0750 France HCOB Composite PMI May 0750 France S&P GLobal Services PMI May 0755 Germany HCOB Services PMI May 0755 Germany HCOB Composite Final PMI May 0800 EU HCOB Services Final PMI May 0800 EU S&P Global Comp Final PMI May 0830 UK Composite PMI Final May 0830 UK Reserve Assets Total May 1345 US S&P Global Comp Final PMI May 1345 US S&P Global Svcs PMI Final May 1400 US Factory Orders MM Apr 1400 US ISM N-Mfg PMI May 1300 Introductory statement by European Central Bank President Christine Ms Lagarde at the hearing before the Committee on Economic and Monetary Affairs of the European Parliament in Brussels (Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips)