* Spot gold seen touching $1,280 -technicals
* U.S. presidential debate had little impact on prices
* ECB policy decision at 1145 GMT (Adds comments, updates prices)
By Apeksha Nair
Oct 20 (Reuters) - Gold pared some early gains on Thursday as the dollar strengthened and markets awaited the outcome of a European Central Bank policy later in the day.
The ECB is set to keep policy unchanged but will likely lay the groundwork for more easing in December as it tries to sustain a long-awaited rebound in consumer prices. monetary policies favor gold and equities because low interest rates encourage investors to opt for assets that do not rely on interest yields.
Some of the shine was taken off gold's earlier move, which was driven by Chinese buying, as the U.S. dollar edged higher, MKS PAMP Group trader Sam Laughlin said.
The dollar index .DXY , which measures the greenback against a basket of currencies, was up 0.1 percent at 98.006. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.
"The yellow metal will be looking toward support broadly between $1,265 - $1,267.90 (the 200-day moving average) for an extension to $1,277 to break above the 200-week moving average," Laughlin said.
Spot gold XAU= was up 0.1 percent at $1,272.20 an ounce as of 0651 GMT. On Wednesday, it had hit its strongest since Oct.5 at $1,273.34.
U.S. gold futures GCcv1 were up 0.2 percent at $1,271.80 an ounce.
"We're looking for gold prices to rally further into the year-end. The market is waiting for the outcome of the (U.S.)presidential elections in November and what the Fed is going to do in December," said OCBC analyst Barnabas Gan.
"Gold rides on suspense and uncertainty and for the very reason we expect gold to touch about $1,300 by the end of the year."
The safe-haven asset's reaction was fairly subdued after the third and final U.S. presidential debate between Democrat Hillary Clinton and Republican Donald Trump. election clarity in terms of Clinton taking lead coupled with U.S. rate hike in December is bearish for gold," said Amit Kumar, research head at Adroit Financial Services.
Spot bullion may rise to touch $1,280 per ounce, as it has cleared resistance at $1,265, according to Reuters technical analyst Wang Tao. reversal in the dollar, coupled with a more robust rally in stocks, could easily sabotage the recent improvement we have been seeing," said INTL FCStone analyst Edward Meir.
Asian stocks advanced on Thursday, propelled by strong U.S. earnings and oil prices near a 15-month high. MKTS/GLOB
Meanwhile, spot silver XAG= was up about 0.2 percent at $17.67 an ounce.
Platinum XPT= rose 0.1 percent to $944, while palladium XPD= rose 0.2 percent to $637.