SINGAPORE, Feb 18 (Reuters) - Gold eased on Thursday following a bounce in equities, but losses were cushioned by overnight gains that helped the metal snap a three-day losing streak on bets the Federal Reserve could slow the pace of U.S. interest rate hikes.
FUNDAMENTALS
* Spot gold XAU= had fallen 0.2 percent to $1,206.99 an ounce by 0034 GMT, after gaining 0.7 percent on Wednesday.
* Fed policymakers worried last month that a global slowdown and financial market selloff could hurt the U.S. economy and considered changing the central bank's planned interest rate hike path for 2016.
* Although most of the policymakers still expected to raise rates this year and even discussed a hike at the Jan. 26-27 policy meeting, they were divided over how to interpret the financial market volatility, according to the minutes from the meeting released on Wednesday. Bank of America Merrill Lynch (N:BAC) on Wednesday reduced its forecast for the number of times the Fed will raise U.S. interest rates this year to two from its earlier projection of three to four due to recent market turbulence. A slower rate hike pace could boost demand for non-interest-paying bullion.
* But gains from the Fed comments were capped by higher stocks that dented safe-haven demand for the metal.
* Asian stocks rose on Thursday, while U.S. shares advanced for the third straight day on Wednesday as the jump in oil prices boosted energy shares.
* Bullion had rallied to a one-year high of $1,260.60 last week on the back of a turmoil in stock markets and concerns over the health of the global economy.
* India is planning to auction at least three gold mines in 2016, a top government official said, opening up the sector to private firms for the first time ever in a bid to slash imports of the metal that cost the government $36 billion last year. Barrick Gold Corp ABX.N ABX.TO , the world's largest gold producer, on Wednesday cut its 2016 total gold production forecast. For the top stories on metals and other news, click TOP/MTL or GOL
MARKET NEWS
* The Canadian dollar held at two-week highs early on Thursday, having benefited hugely from a jump in oil prices. The dollar and euro remained in consolidation mode against the yen, having found a floor at multi-month lows last week. USD/
DATA AHEAD (GMT)
0130 China Consumer prices Jan
0130 China Producer prices Jan
0900 Euro zone Current account Dec
1330 U.S. Weekly jobless claims
1330 U.S. Philly Fed business index Feb
1500 U.S. Leading index Jan
PRICES AT 0034 GMT Metal
Last
Change Pct chg
Spot gold
1206.99
-1.77
-0.15 Spot silver
15.281 -0.007
-0.05 Spot platinum
939.49
-3.14
-0.33 Spot palladium
513.47
2.22
0.43 Comex gold
1207.9
-3.5
-0.29 Comex silver
15.305 -0.072
-0.47
COMEX gold and silver contracts show the most active months