Soft U.S. data supports gold, but weekly dip on the cards

SINGAPORE (Reuters) - Gold clung to overnight gains on Friday on sluggish U.S. economic data but the metal was poised for its third straight weekly drop on persistent uncertainty over when the Federal Reserve will begin to hike rates.

FUNDAMENTALS

* Spot gold > was steady at $1,193.15 an ounce by 0033 GMT, after gaining 0.6 percent in the previous session.

* Bullion got a boost on Thursday after data showed the number of Americans filing new claims for unemployment aid edged up last week for a third straight week.

* Other data showed U.S. manufacturing sector dipped more than expected in April, while home sales recorded their biggest drop in more than 1-1/2 years in March.

 

* The weak data hurt the dollar and boosted safe-haven bids for gold, but added to the uncertainty over whether the Federal Reserve will hike rates in June or September.

* Bullion investors fear an early rate hike to reduce demand for gold, a non-interest-paying asset. The metal is down nearly 1 percent this week, its sharpest such decline in seven weeks.

* Attention will now turn to the Fed's policy meet next week for stronger clues on when the U.S. central bank would begin rising rates.

* In other industry news, South Africa's National Union of Mineworkers is planning to submit demands to the gold sector next week calling for a 75-percent hike in the basic pay for entry-level workers, according to union sources familiar with the matter.

* Kyrgyzstan's Prime Minister Joomart Otorbayev resigned on Thursday after failing to clinch a deal with Canada's Centerra Gold on the future of the country's biggest gold mine.

* Anglo American favours a listing of some South African platinum mines as the most likely route to divesting those assets, the mining group's chief executive said.

* For the top stories on metals and other news, click [TOP/MTL] or [GOL/]

MARKET NEWS

* The dollar nursed losses early on Friday after yet more underwhelming U.S. economic news, while signs that cash-strapped Greece was making tentative progress in securing fresh funding helped underpin a broad rally in the euro. [USD/]

DATA/EVENTS (GMT)

0800 Germany Ifo business climate Apr

1230 U.S. Durable goods orders Mar

PRICES AT 0033 GMT

Metal Last Change Pct chg

Spot gold 1193.15 -0.45 -0.04

Spot silver 15.86 -0.01 -0.06

Spot platinum 1133 0.65 0.06

Spot palladium 770.3 2.7 0.35

Comex gold 1192.7 -1.6 -0.13

Comex silver 15.84 0.011 0.07

Euro 1.0811

DXY 97.367

COMEX gold and silver contracts show the

most active months

(Reporting by A. Ananthalakshmi; Editing by Michael Perry)