* European shares rise, dollar recovers from 16-month low
* SPDR Gold holdings hit more than two-year high
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates prices)
By Clara Denina
LONDON, May 5 (Reuters) - Gold steadied after three sessions of losses on Thursday but remained well below a 15-month peak as the dollar rose on hopes the U.S. economy could bounce back after nearly stalling in the first quarter.
Data on Wednesday showed the U.S. services sector expanded in April as new orders and employment accelerated. Another report, however, showed U.S. private employers hired the fewest workers in three years in April. is likely to hold in the current range between $1,250 and $1,300 until the end of the quarter, when we will have more clarity about the Fed's interest rates path," Natixis analyst Bernard Dahdah said.
"We need a streak of positive data points from the U.S., which I'm not expecting this quarter, due to the impact of global growth weakness," Dahdah said.
Spot gold XAU= was up 0.1 percent at $1,278.40 an ounce by 1148 GMT, though that was still down 1.9 percent from Monday's peak. U.S. gold futures GCcv1 rose 0.5 percent to $1,281.20.
Gold jumped to a 15-month high of $1,303.60 on Monday as the dollar slumped against the yen after the Bank of Japan stood pat on policy, before the U.S. currency recovered. FRX/
The precious metal has risen 21 percent this year as expectations the Fed would push ahead with interest rate increases faded.
Gold is sensitive to interest rates and returns on other assets as higher rates lift the opportunity cost of holding the metal.
"The rally has stalled, but not reversed. But it may still be in for further near-term losses," HSBC said in a note. "The bullion market will continue to monitor Fed policy and likely be affected by statements from policymakers."
The metal was also dented by stronger European equities, signalling higher investor appetite for risk.
Still, investor interest in gold remains robust. Assets in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.07 percent to 825.54 tonnes on Wednesday, their highest in more than two years. GOL/ETF
Among other precious metals, silver XAG= rose 0.3 percent to $17.39 an ounce, platinum was down 0.2 percent at $1,052.27 and palladium was up 0.1 percent at $601.
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