* Gains in dollar index limit upside for gold
* Gold seen in holding pattern until more data emerges (Updates prices, headline; adds comment, byline, CHICAGOdatelineprevious dateline LONDON)By Renita D. Young and Maytaal AngelCHICAGO/LONDON, Aug 9 (Reuters) - Gold was near flat onThursday after two straight sessions of gains as a stronger U.S.dollar index weighed on upside momentum, though the preciousmetal took some comfort from a steadier Chinese currency.Gold has been highly correlated with the yuan in recentweeks, with the Chinese currency acting as a proxy for concernsabout U.S.-China trade tensions.The yuan steadied against the dollar as greenbackbulls remained wary of potential policy moves to stabilize theChinese currency. The dollar rose against a basket of major currencies asgeopolitical tensions faded, though traders said the greenbackneeded fresh impetus or an escalation in trade tensions to movehigher. A strong dollar makes dollar-priced gold costlier fornon-U.S investors."Right now, gold is in a holding pattern until you get alittle bit more of data," said Josh Graves, senior commoditiesstrategist at RJO Futures.He noted U.S. jobless claims came in lower than expected inthe latest week, signifying a stronger economy and littlenecessity for safe-haven bids, like non-yielding gold. U.S. Consumer Price Index figures, which gauge inflation onconsumer expenses, are expected early on Friday.Spot gold was flat at $1,213.05 per ounce by 1:35p.m. EDT (1735 GMT). U.S. gold futures for Decemberdelivery settled down $1.10, or 0.1 percent, at $1,219.90 perounce."We still think (gold) will move higher in the second halfbecause the dollar will weaken a bit, the Chinese government istrying to stop the yuan (from) weakening, and we'll have moreconcerns over trade," said Bank of America-Merrill Lynch analystMichael Widmer.China said late on Wednesday it would slap retaliatorytariffs of 25 percent on $16 billion worth of U.S. imports. Washington said it would impose fresh sanctions on Russiaafter it determined Moscow used a nerve agent against a formerRussian agent and his daughter in Britain. Gold, a traditional safe haven, has largely failed tobenefit from rising geopolitical tensions this year, asinvestors have chosen the safety of the dollar over the preciousmetal.The Federal Reserve has raised U.S. interest rates twicethis year and has targeted two more hikes. Higher U.S. ratestend to boost the dollar and Treasury yields, adding pressure ongreenback-denominated, non-yielding bullion.Silver rose 0.4 percent to $15.45 an ounce, whileplatinum was unchanged at $826.50. Both earlier hitsix-day highs at $15.51 and $839.90, respectively.Palladium increased 0.7 percent to $906 per ounce,after hitting a more than two-week low in the previous session. (Additional reporting by Apeksha Nair in Bengaluru; editing byDavid Evans, G Crosse)