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* Dollar extends losses to 15-month lows
* Investors look to U.S. payrolls on Friday
* SPDR Gold Trust holdings down more than 7 pct in July
By Marcy Nicholson and Peter Hobson
NEW YORK/LONDON, Aug 2 (Reuters) - Gold rose on Wednesday, nearing seven-week highs as the dollar fell to a 15-month low and U.S. data showed fewer-than-expected new jobs in July, bringing into question chances of the Federal Reserve raising interest rates in the coming months. is highly sensitive to rising rates because they lift bond yields, raising the opportunity cost of holding non-yielding bullion, and tend to boost the dollar, in which gold is priced.
Spot gold XAU= was up 0.2 percent at $1,270.43 an ounce by 1:50 p.m. EDT (1750 GMT), just below Tuesday's high of $1,273.97, the highest since June 14.
U.S. gold futures GCcv1 settled down 0.08 percent at $1,278.40.
"This is one of the quieter sessions that I've seen in a while. Part of it is anticipation of the employment report," said Bill O'Neill, co-founder of LOGIC Advisors, pointing to technical resistance in bullion around $1,280.
The U.S. dollar index .DXY fell to a 15-month low as traders eyed doubts about another U.S. rate increase this year, USD/
"That's helped perked things up off the lows," O'Neill said, adding that gold's uptrend remained intact.
U.S. private employers added 178,000 jobs in July, below economists' expectations, a payrolls processor report showed. were looking ahead to the more comprehensive U.S. non-farm payrolls report on Friday for a clearer indication of the Fed's intentions. ECONUS
While weak employment data may dissuade the Fed from aggressive interest rate increases, gold is likely to come under pressure from the bank's plans to shrink its balance sheet, said Mitsubishi analyst Jonathan Butler.
"If the Fed is no longer investing the proceeds of its maturing debt then we would expect the price of those securities to go down and the yield to go up, which is not good for gold," he said.
Demand for physical gold has been weak, with holdings in the largest gold-backed exchange-traded-fund, the SPDR Gold Trust, falling more than 7 percent in July, the biggest monthly outflow since April 2013. GOL/ETF
Among other precious metals, silver XAG= was up 0.1 percent at $16.69 an ounce after touching its highest since June 29.
Platinum XPT= was up 0.2 percent at $945.20 an ounce, after rising to $951.40, the highest since June 14 and near the 200-day moving average.
Palladium XPD= , used in the automotive industry for emission-controlling catalytic converters, was 0.2 percent higher at $893.50 an ounce after rising to $906, the highest since June 13.
But U.S. car sales data had disappointed, analysts at Commerzbank (DE:CBKG) said. "We no longer see any justification for the high palladium price."