* ECB leaves rates on hold; Draghi sounds dovish note
* U.S. weekly jobless claims cast shadow on labour market
* Bank of Japan also in easing mode
* GFMS points to start of longer-term bear market in 2014 (Adds comments, updates prices)
By Clara Denina
LONDON, April 4 (Reuters) - Gold was down slightly on Thursday after rallying from a 10-month low earlier in the day to above $1,550 an ounce when the European Central Bank commented on the weak economy and said it stood ready to cut rates, hitting the euro.
The ECB kept interest rates on hold as widely expected, but a later statement from President Mario Draghi focused on the euro zone economy's downside risks, indicating that interest rates could ease further.
U.S. data overnight also favoured gold, with weekly jobless claims hitting a four-month high and suggesting the labour market recovery had lost some steam in March.
But bullion is facing an uphill battle due to generally improved economic fundamentals.
"Gold is desperately trying to bounce, but it's failing quite miserably. It's trying to react positively to negative news and dovish comments, but sentiment is so shaken that it will take more than this," Saxo Bank Vice President Ole Hansen said, adding that most investors might prefer to wait for Friday's U.S. non-farm payrolls report before moving further.
"We're very close to critical levels, and technical traders are talking about calamity on a break below $1,530 and that is such an attractive level for speculative traders," he said.
Spot gold early in the day fell as low as $1,539.74 an ounce, its lowest since May 30, before recovering partially to $1,549.62 by 1359 GMT, still down 0.5 percent on the day.
On the charts, the next downside target stands at the May low of $1,527, traders said.
U.S. gold for June delivery was down 0.2 percent to $1,550.
Gold looks likely to enter a bear market cycle in 2014 after more than a decade of gains as consumer demand for jewellery, coins and bars declines and central bank buying plateaus, metals consultancy GFMS said in its Gold Survey 2013.
GFMS still held out prospects for bullion to reach the mid-$1,800s later this year, however, if a major event such as a breakdown in negotiations over the U.S. debt ceiling, which would weigh down on the dollar, were to spark bouts of investment buying.
The dollar rose strongly against the yen earlier after the Bank of Japan announced aggressive measures to ease monetary policy, including a plan to double its holdings of bonds and stocks in two years.
"Further easing from the BOJ should ultimately be positive for gold, but for now seems unable to match the combination of poor sentiment and a firmer dollar," UBS said in a note.
There was further liquidation of gold-backed ETFs on Wednesday, with holdings of the largest, New York's SPDR Gold fund declining another 2.71 tonnes after the previous session's 8.1 tonne outflow.
Physical demand was stronger in Asia after prices fell and as North Korea moved what appeared to be a mid-range missile to its east coast, according to South Korea's Yonhap news agency.
Tokyo gold futures declined as much as 2.1 percent before paring some losses as the weaker prices ignited buying from speculators in Japan. Premiums for gold bars in Tokyo edged up to 50 cents an ounce over spot London prices from zero earlier this week.
Those precious metals more widely used in industry came under pressure, also due to the weak U.S. economic data overnight.
Silver tumbled to its lowest level since July 24 at $26.62 an ounce and was later at $26.74, down 0.6 percent.
Platinum dropped to its lowest since late August at $1,504.50. It was later at $1,520.49, down 0.7 percent, while palladium was down 1.9 percent at $736. (Additonal reporting by Veronica Brown in London; Editing by Helen Massy-Beresford and Jane Baird)