* Prices below $1,300 an ounce, near 3-week lows * Could dip towards $1,250 - technicals * Physical demand fails to pick up despite lower prices (Adds dealer comment, updates prices) By A. Ananthalakshmi SINGAPORE, Nov 11 (Reuters) - Gold eased on Monday to trade near three-week lows as strong U.S. jobs growth reignited fears the Federal Reserve could soon start scaling back its stimulus, denting bullion's appeal as a hedge against inflation. Indications that the U.S. economy was on a firmer footing than expected could prompt the central bank to start cutting back on its $85 billion monthly bond purchases as early as next month, some investors say. Some say the cutbacks will start only next year. "I think the Fed will still look for stronger evidence on the economic recovery," said Barnabas Gan, an analyst with OCBC Bank. "We are not exceptionally bullish on upcoming data. Markets will continue be on a data-watching mode." Gan expects gold prices to rise to $1,320 an ounce by the end of 2013 and Fed's tapering to start early next year. Spot gold fell 0.2 percent to $1,286.51 an ounce by 0742 GMT after losing 1.5 percent in the previous session, its biggest one-day fall in about a month, triggered by the strong U.S. payrolls data. Gold has already lost nearly a quarter of its value this year amid expectations of a tapering. U.S. employers took on 204,000 new employees last month, almost twice the number forecast by analysts and defying expectations that a partial U.S. government shutdown would hamper job growth. Markets have been hoping that the 16-day government shutdown in early October and its impact on the economy will prevent the Fed from slowly withdrawing its bullion-friendly stimulus. Gold had touched record highs of $1,920 an ounce in 2011, helped partly by stimulus measures from central banks around the world at the time. Prices are expected to test support of $1,278, a break below which will lead to a further drop to $1,251.66, according to a 24-hour technical outlook by a Reuters analyst. PHYSICAL DEMAND STILL WEAK Gold's recent drop to below $1,300 has, however, failed to attract demand in Asia as buyers wait on the sidelines amid hopes for prices to weaken further. Dealers in Hong Kong said demand has not picked up strongly and premiums remained stable at about $1.50 an ounce. Prices have to fall towards $1,200 an ounce for demand to increase, one dealer said. Another dealer said weakness in regional currencies against the U.S. dollar was also curbing demand. Premiums on the Shanghai Gold Exchange increased only slightly to about $5 an ounce from $4 on Friday. Precious metals prices 0742 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1286.51 -2.09 -0.16 -23.17 Spot Silver 21.39 -0.07 -0.33 -29.36 Spot Platinum 1438.24 -0.26 -0.02 -6.30 Spot Palladium 754.50 -1.47 -0.19 9.03 COMEX GOLD DEC3 1286.10 1.50 +0.12 -23.25 16656 COMEX SILVER DEC3 21.39 0.07 +0.34 -29.42 4522 Euro/Dollar 1.3372 Dollar/Yen 98.94 COMEX gold and silver contracts show the most active months

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