* Bullion on track for 2nd straight weekly fall
* Gold looks neutral in range of $1,303-$1,318 -technicals
* SPDR Holdings drop for third straight session
* Platinum off 2-mth lows, palladium off 6-wk lows (Adds comment, updates prices)
By Sethuraman N R
Sept 2 (Reuters) - Gold traded in a narrow range on Friday after touching its lowest in over two months the session before, with the dollar volatile after weak U.S. manufacturing data raised doubts on the economy's strength ahead of closely-watched payroll numbers.
Spot gold XAU= had eased 0.3 percent to $1,310.23 per ounce by 0706 GMT. The metal on Thursday hit its lowest since June 24 at $1,301.91 and was on track for its second straight weekly loss.
U.S. gold futures GCcv1 edged down to $1,317.50.
"(The Federal Reserve head's) comments from last week have put pressure on gold and we need to see the jobs data, which is likely going to be really good," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
U.S. factory activity contracted in August for the first time in six months as new orders and production tumbled, but a low level of layoffs continued to point to a pickup in economic growth in the third quarter.
Other U.S. data showed initial claims for state unemployment benefits rose less than expected last week, pointing to sustained labour market strength. upbeat nonfarm payrolls report on Friday would reinforce the view that a U.S. rate hike may be on the cards, after Fed officials sounded a hawkish note at a meeting last weekend. good jobs number could generate enough concern over a near-term rate rise to bolster the dollar and undercut gold," HSBC analyst James Steel said in a note.
There will very likely be an aggressive sell-off if prices breach the $1,300-level, Alex Thorndike, senior precious metals dealer with MKS PAMP Group said.
"Longer term, however, we feel that it may prove an attractive opportunity to buy if we do shoot lower, with a number of investors who missed the post-Brexit move looking to get into the metal."
The dollar index .DXY , which measures the greenback against a basket of currencies, rose 0.1 percent to 95.751 USD/
Spot gold looks neutral in a range of $1,303-$1,318 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao. of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, fell for a third straight session. Holdings dropped 0.57 percent to 937.89 tonnes on Thursday. GOL/ETF
Spot silver XAG= was almost unchanged at $18.84 an ounce.
Platinum XPT= was nearly flat at $1,041.70. It earlier touched its lowest since July 1 at $1,035.15. Platinum was heading for its fourth straight weekly loss.
Palladium XPD= rose 0.3 percent to $665.43, after falling to a six-week low of $654.72.