Oct 27 (Reuters) - Gold prices inched down on Thursday to extend losses from the previous session as the U.S. dollar steadied against the yen, but underlying demand for bullion was seen as robust ahead of major festivals in India.
FUNDAMENTALS
* Spot gold XAU= was down nearly 0.1 percent at $1,265.51 an ounce at 0053 GMT. It fell 0.6 percent on Wednesday.
* U.S. gold futures GCcv1 were nearly unchanged at $1,266.50 an ounce.
* Demand for bullion is expected to pick up ahead of festivals in India such as Dhanteras and Diwali, when gold is traditionally given as a gift.
* The dollar edged up against the yen early on Thursday while the euro and sterling held their gains versus the greenback, with a rise in bond yields supporting the currencies. USD/
* The dollar index .DXY , which measures the greenback against a basket of currencies, was firm at 98.646.
* New U.S. single-family home sales unexpectedly rose in September, pointing to sustained demand for housing even as data for the prior three months was revised lower. The European Central Bank is nearly certain to continue buying bonds beyond its March target and to relax its constraints on the purchases to ensure it finds enough paper to buy, central bank sources have told Reuters. The Bank of Japan is likely to hold off on expanding stimulus next week despite an expected downgrade in its price forecast that may show Governor Haruhiko Kuroda won't see inflation hit his 2 percent target before his tenure ends in 2018. Britain escaped a severe economic slowdown in the three months after the Brexit referendum shock, official figures are expected to show on Thursday, further diminishing the chance of a fresh interest rate cut by the Bank of England next week. The Bank of England is not now expected to ease policy until early 2017, according to economists in a Reuters poll who almost unanimously said staying in the European Union would be the best for Britain's long-term trading prospects. SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings fell 1.49 percent to 942.59 tonnes on Wednesday. For the top stories on metals and other news, click TOP/MTL or GOL
DATA AHEAD (GMT)
0830 Britain
Preliminary GDP
Q3
1230 U.S.
Durable goods
Sep
1230 U.S.
Weekly jobless claims
1400 U.S.
Pending homes sales
Sep