By Maytaal Angel
, LONDON (Reuters) - Gold hit a one-week low on Thursday as a stronger dollar, upbeat sentiment on equities and positive U.S. growth data dented the appeal of the safe-haven asset, though the metal was still stuck in its narrowest monthly range in 12 years.
The dollar held firm after U.S. jobless and consumer spending data, having taken support from Wednesday's uplift on third-quarter U.S. economic growth. Strength in the U.S. currency makes dollar-priced gold costlier for non-U.S. investors.
Global equities were on course to finish November with a 13th consecutive monthly gain, though a dive in U.S. technology stocks left investors wondering whether the longest global equity bull run in living memory might be starting to splutter.
Also denting investor optimism and signalling underlying support for gold going forward, investors were growing wary about the staggered progress of U.S. tax reform legislation.
"Optimism (in equities) is at record highs, so it should come off a bit, which would be reasonably positive for gold. But the stronger dollar will cap any gains that come on the back of (that)," said Martin Arnold, strategist at ETF Securities.
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"Current levels (in gold) are good value and we don't expect the range over the past month to be broken."
Spot gold was down 0.5 percent at $1,277.58 an ounce by 1332 GMT, having earlier hit its lowest since Nov. 22 at $1,276.51.
The price is up 0.5 percent this month, though it has been stuck between $1,265 and $1,300 throughout November.
U.S. gold futures were down 0.4 percent at $1,280.50.
The U.S. economy has gathered steam this year and will warrant continued interest rate increases amid a strengthened global recovery, Federal Reserve Chair Janet Yellen said on Wednesday.
Bullion is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding gold.
"While we remain cautious on it (gold) over three months, we regard setbacks as opportunities to add exposure," UBS analysts said in a note, while raising their 12-month forecast from $1,250 an ounce to $1,325.
"In the past, early stages of monetary policy normalisation hurt gold; but this time such adjustments resemble baby steps and likely will only be undertaken in sync with rising inflation."
Silver touched an eight-week low of $16.37 an ounce and was last down 0.7 percent at $16.41.
Palladium was down 0.4 percent at $1,009.20, while platinum rose 0.5 percent to $940.70.
(Additional reporting by Vijaykumar Vedala in Bengaluru; Editing by David Goodman)
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