* European shares rise after euro zone manufacturing data
* China, U.S. factory numbers for March disappoint
* Silver at cheapest compared with gold since mid-August (Updates prices)
By Clara Denina
LONDON, April 2 (Reuters) - Gold held below $1,600 an ounce on Tuesday as a slightly brighter than expected reading of euro zone manufacturing activity lifted stock markets, diverting interest from bullion.
Investors were reluctant to build significant positions ahead of Bank of Japan and European Central Bank policy meetings on Thursday and U.S. payroll numbers on Friday, however.
Spot gold hit an intraday high of $1,603.60 an ounce in the first session after the Easter break, but it was unable to hold on to gains and dipped to $1,596.81 by 1151 GMT, down 0.1 percent on the day.
The metal snapped three weeks of gains last week to fall 0.7 percent, but managed to post a 1.1 percent rise in March. It fell 4.6 percent in the first quarter.
U.S. gold futures for June delivery were down 0.2 percent at $1,597.80 an ounce.
"Gold has not really found the catalyst to take it out of the range we have seen for few weeks, and weaker data haven't made much impact as key macro events are still to come later in the week," Saxo Bank senior manager Ole Hansen said.
"Going forward into the second quarter, there seems to be a much better balance for gold to react to economic data after speculative positions have been much reduced and exchange-traded products saw record outflows."
Liquidity was slowly returning as most financial markets in Europe, including London, returned from the Easter holiday.
European shares extended their gains after slightly better than feared euro zone manufacturing data, rising about one percent.
Markit's Eurozone Manufacturing Purchasing Managers' Index fell in March to 46.8 from 47.9 in February, slightly better than a preliminary estimate of 46.6, with the Cyprus bailout crisis yet to take a toll on the euro zone's factory activity.
The dollar and Asian shares struggled overnight after data showed U.S. factory activity grew at the slowest rate in three months in March, indicating the economy lost some momentum at the end of the first quarter.
The euro fell against the dollar, also kept on the back foot by worries about the political deadlock in Italy and the bailout crisis in Cyprus.
INVESTMENT LACKING MOMENTUM
Gold was still lacking investment momentum, with the world's largest gold-backed exchange-traded fund, New York's SPDR Gold shares, reporting an outflow of 4.212 tonnes on Monday. Its holdings are down 133.8 tonnes this year and haven't posted a one-day net increase since March 19.
Physical demand was also lacklustre in Asia, with gold bars remaining on par with spot London prices in Tokyo. Premiums for gold bars were little changed in Singapore and Hong Kong at $1.20 to $1.50 an ounce to spot London prices.
However, Asian buying could be bolstered by the latest geopolitical worries in Korea after North Korea announced plans on Tuesday to restart a mothballed nuclear reactor that has been closed since 2007.
"If tensions on the Korean peninsula remain high we expect gold to benefit more than in previous periods of tensions, due to enhanced geopolitical uncertainty," HSBC said in a note.
Sibanye Gold said on Tuesday it had started talks that may lead to job cuts at its Beatrix West operation in South Africa after an underground fire hit output and revenue.
The company, a spin-off of South African's Gold Fields , said that the underground fire had cost it 61 kgs per month in lost production and that the damaged area would be inaccessible until at least mid-2014.
The more industrial precious metals came under pressure from weak economic data in China and the United States on worries over future demand.
Spot silver was little changed at $28 an ounce, hovering around its lowest since late August 2012, the $27.85 seen in the previous session.
Silver was at its cheapest compared with gold since mid-August, with an ounce of gold buying 57.2 ounces of silver, against 55.3 ounces at the start of the year.
Platinum fell 0.3 percent to $1,585.24, while palladium dropped 1.2 percent to $769.49. (Editing by Jan Harvey and David Goodman)