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* Optimism over U.S. growth hurts prices for second day
* Weak China export data sparks selling of commodities
* Largest gold ETF reports first inflow since Feb. 25
(Updates prices)
By Jan Harvey
LONDON, March 10 (Reuters) - Gold prices steadied on Monday, under pressure from last week's strong U.S. payrolls data and a sharp drop in Chinese exports which fuelled selling of commodities, but supported by tensions in Ukraine.
Spot gold
The precious metal fell 0.8 percent on Friday after data showed U.S. employers added 175,000 jobs to payrolls, beating forecasts and suggesting the Federal Reserve's stimulus tapering efforts will stay on course.
The dollar index bounced off four-month lows following the data, while U.S. Treasury yields rose to their highest in six weeks.
"Clearly gold is battling headwinds coming from the improving U.S. economy, certainly on the jobs front," Societe Generale analyst Robin Bhar said. "We see a close (negative) correlation between gold and the U.S. 10-year yield, which spiked up on Friday, and saw gold at its recent lower levels."
However, ongoing concerns over the stand-off in Ukraine were likely to underpin the metal, he added. "There's some risk aversion, which should be supportive," he said. "I'd expect to see a broad $1,330-1,350 range."
Russian forces consolidated their hold on Ukraine's Crimea peninsula on Monday, taking over a military hospital and a missile base as officials geared up for a referendum on the region's future.
On the wider markets, commodities sold off after the surprise fall in China's exports, with copper sinking to 8-1/2-month lows, while oil lost more than a dollar and Shanghai-traded commodities slumped.
Asian stocks also fell sharply and the dollar stepped back from its recent highs after the news, although stocks clawed back some lost ground in Europe.
China, the world's biggest consumer of many commodities including gold, said on Saturday that its exports unexpectedly tumbled in February, swinging the trade balance into deficit.
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TWO-WAY FLOWS
Chinese prices were trading at a discount of $5-$6 an ounce to spot prices on Monday, traders said, in a sign of weak demand. Prices were at a premium of more than $20 at the beginning of the year.
Two-way flows were evident in Asian gold trading overnight, MKS said in a report. "Once the Shanghai Gold Exchange opened some aggressive selling ensued, driving the price below $1,330," it said. "Once again retail bids below this level emerged and supported the market."
Investor sentiment towards gold has been positive this year after a 28 percent drop in prices in 2013.
Hedge funds and money managers raised their bullish bets in gold futures and options for a fourth consecutive week as geopolitical tensions boosted speculative interest to the highest in more than a year, according to Friday data from the Commodity Futures Trading Commission.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust
Among other precious metals, silver
The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, eased back from Friday's one-month high above 64 as silver outperformed.
Spot platinum
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Anthony Barker)
((jan.harvey@thomsonreuters.com)(+44)(0)(207 542 7744)(Reuters Messaging: jan.harvey.thomsonreuters.com@reuters.net))
Keywords: MARKETS PRECIOUS/