MANILA, July 30 (Reuters) - Gold hovered not far from a 5-1/2-year low early on Thursday after the Federal Reserve said the U.S. economy and job market continue to strengthen, supporting a possibile interest rate rise when the Fed meets again in September.
Following a two-day policy meeting on Wednesday, policymakers said they felt the economy had overcome a first-quarter slowdown and was "expanding moderately" despite a downturn in the energy sector and headwinds from overseas. ID:nTLATIEB24
FUNDAMENTALS
* Spot gold XAU= was flat at $1,096.75 an ounce by 0036 GMT. It sank to as low as $1,077 last week, its weakest since February 2010, after a selloff in New York and Shanghai and has since struggled to recover above $1,100.
* U.S. gold for August delivery GCcv1 gained 0.3 percent to $1,096 an ounce.
* A looming increase in U.S. interest rates, the first since 2006, had weighed on non-interest bearing gold, with some analysts predicting further falls before and after the actual rate hike.
* U.S. economic growth is set to pick up after a lackluster first half, allowing the Federal Reserve to raise interest rates in September, according to a Reuters poll published last week. ID:nL1N1010UE
* The first estimate of second-quarter U.S. gross domestic product will be released later on Thursday. The economy is seen returning to growth, expanding by 2.7 percent, after a contraction in a weather-battered first quarter.
* But contracts to buy previously owned U.S. houses unexpectedly fell in June after five straight months of increase, suggesting some cooling in home resales activity after recent hefty gains. ID:nL1N1091CT
* Holdings of the largest gold-backed exchange-traded-fund, New York's SPDR Gold Trust GLD , were unchanged at 21.87 million ounces for a second day on Tuesday. That level is the lowest since September 2008 and followed a seven-day slide in holdings. GOL/ETF
* Kinross Gold Corp K.TO is again considering cutting jobs at its Tasiast gold mine in Mauritania as the Canadian miner cuts costs at its higher-cost mines amid sliding metals prices. ID:nL1N1093GA
* Gold prices are at risk of falling to as low as $1,050 per ounce, Goldman Sachs (NYSE:GS) global head of commodities research Jeffrey Currie said in an interview with CNBC on Wednesday, reinforcing the bearish outlook for bullion after last week's rout. ID:nL1N10926O
* For the top stories on metals and other news, click TOP/MTL or GOL/
MARKET NEWS
* The dollar held steady in cautious trade ahead of U.S. gross domestic product data that could reinforce or dent expectations that the Federal Reserve is on track to raise interest rates as early as September. Asian shares were mostly firm. USD/ MKTS/GLOB
DATA AHEAD (GMT)
0755 Germany
Unemployment rate
July
0900 Euro zone
Busines climate
July
0900 Euro zone
Consumer confidence
July
0900 Euro zone
Unemployment rate
June
1200 Germany
Consumer prices
July
1230 U.S.
GDP advance
Q2
1230 U.S.
Weekly jobless claims