* U.S. payrolls data beats forecasts, boosts dollar
* Gold bounces from lows as investors hunt bargains
* Gold on track for 6th straight week higher
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates prices; adds comment, second byline, NEW YORK dateline)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, July 8 (Reuters) - Gold slipped sharply on Friday after stronger than expected U.S. payrolls data for June but rebounded quickly, underpinned by concerns over the outlook for financial markets following Britain's Brexit vote.
Gold hit a low of $1,335.66 an ounce in the wake of data showing that U.S. non-farm payrolls increased by 287,000 jobs last month, the largest gain since October. That sent the dollar to a two-week high against the euro and reignited talk that the U.S. Federal Reserve could lift interest rates this year.
Spot gold XAU= , which has risen more than $100 an ounce since Britain voted to quit the EU, was down 0.1 percent at $1,358.87 an ounce by 2:27 p.m. EDT (1827 GMT). It was on track to close higher for the sixth straight week.
U.S. gold futures GCv1 for August delivery, which fell as low as $1,336.30 an ounce in the wake of the jobs data, settled down 0.3 percent at $1,358.40.
"The knee-jerk reaction to the stronger than expected payrolls data has been lower, but you're already seeing gold bounce off the lows," UBS analyst Joni Teves said.
"There are still a lot of people out there who want to build gold positions, and will be keen to come in on any retracements."
Traders had awaited the payrolls data for clues on U.S. monetary policy. Fed futures contracts, which suggested before the jobs report that traders saw only a 19 percent chance of a U.S. rate hike by December, now suggest a higher chance. rates tend to boost gold prices because they cut the opportunity cost of holding non-yielding bullion while weighing on the dollar, in which it is priced.
"It's a great indicator that the market is still affected by the Fed having to keep interest rates low despite the jobs report, and concerns are exacerbated by Brexit," said Anthem Blanchard, chief executive of Anthem Vault, noting the quick recovery after an early drop.
SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings fell by a little more than four tonnes on Thursday to 978.29 tonnes, having posted its biggest daily inflow in six years on Tuesday. GOL/ETF
In India, gold discounts soared to a record high of up to $100 an ounce this week as prices in the world's second-largest bullion consumer hit their highest in nearly three years. GOL/AS
Silver XAG= was up 2.2 percent at $20.09 an ounce, platinum XPT= rose 1 percent at $1,097 and palladium XPD= was up 1 percent at $614.30.
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