* Sentiment on bullion remains bearish - analyst * Silver hits a more than eight-month low of $22.50/oz (Recasts, adds comments, updates prices) Aug 9 (Reuters) - Gold fell to its lowest in more than four months, dropping as much as 4.4% at one point on Monday, as the dollar rallied after strong U.S. labour data bolstered expectations for early tapering of economic support. Spot gold was down 0.9% at $1,746.80 per ounce at 0837 GMT. Prices slumped below $1,700 in early Asia trade but pared some of those losses. U.S. gold futures shed 0.8% to $1,748.30. Silver too was caught in gold’s slipstream to slide 7.5% to its lowest in more than eight-months of $22.50 per ounce. It was last down 1.9% to $23.87. While the market may have over-reacted to the jobs data, sentiment in bullion remained bearish for now, said Carlo Alberto De Casa, market analyst at Kinesis. Still, some investors were looking for bargains, he said. “Even if the Federal Reserve is reducing liquidity, it is not going to happen today or tomorrow; it will take time.” U.S. Labor Department data showed employers hired the most workers in nearly a year in July and continued to raise wages. Gold is considered a hedge against inflation possibly resulting from massive liquidity pumped into the economy by central banks. An interest rate hike by the Fed would also dull non-yielding bullion’s appeal compared with interest-earning assets. The dollar’s spike to a two-week high also hurt appetite for gold by making it more expensive for holders of other currencies . But while short-term negativity in gold could continue, risk averse investors will offer some support. “The pandemic is not truly behind us,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus. “There will be investors looking for these levels to buy up gold as a protection.” Platinum fell 0.8% to $972.00, having earlier hit its lowest since November 2020 of $959.93. Palladium was down 0.2 % to $2,622.16. (Reporting by Arundhati Sarkar and Eileen Soreng in Bengaluru Editing by Tomasz Janowski) Our Standards: The Thomson Reuters Trust Principles.