By A. Ananthalakshmi
SINGAPORE (Reuters) - Gold was steady on Thursday after snapping a seven-day fall in the previous session as investors bet the U.S. monetary stimulus will continue for longer and as holdings in the top gold-backed exchange-traded fund rose for the first time in two weeks.
The metal has been stuck in a narrow $1,306-$1,321 an ounce range this week as markets await key U.S. economic data for clues on when the Federal Reserve will begin rolling back its $85 billion monthly bond purchases.
Investors are eyeing U.S. GDP data on Thursday and nonfarm payrolls data on Friday before placing any big bets.
"In the last few days gold has predominantly been driven by movements in the dollar. It will probably take a fresh direction once we get the nonfarm payroll data," said Mark Keenan, cross-commodity research strategist at Societe Generale.
"(Price movement) is going to be data dependent. It is also critical to watch what happens with ETF holdings," said Keenan.
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Spot gold was up 0.1 percent at $1,317.91 an ounce by 0716 GMT, after gaining 0.5 percent on Wednesday.
The euro hovered near one-week highs against the dollar as strong German data prompted investors to scale back expectations of an European Central Bank rate cut at its policy meeting later on Thursday.
Outflows from gold ETFs have had a significant impact on prices this year. Expecting a scale back in stimulus measures, investors have been shifting money out of gold and into equities.
SPDR Gold Trust, the largest gold ETF, said its holdings rose 2.10 tonnes to 868.42 tonnes on Wednesday - the first increase since October 22.
The fund has seen over 450 tonnes in outflows this year, driving holdings to their lowest since early 2009.
(Editing by Muralikumar Anantharaman and Richard Pullin)