MANILA, Aug 14 (Reuters) - Gold backed further away from a three-week high early on Friday but was still set to end a seven-week losing streak after China's yuan devaluation pushed investors out of equities and into safe-haven assets.
Speculation that the weaker yuan could delay a U.S. interest rate hike this year also benefited gold although China's central bank said there was no reason for the yuan to fall further given the country's strong economic fundamentals.
FUNDAMENTALS
* Spot gold XAU= was down 0.2 percent at $1,112.95 an ounce by 0045 GMT, after peaking at $1,126.31 on Thursday, its highest since July 20.
* Bullion has gained nearly 2 percent for the week so far, after a seven-week slide that was its longest retreat since 1999.
* U.S. gold for December delivery GCcv1 eased 0.2 percent to $1,113 an ounce.
* China's gold demand this year is expected to at least hold steady with last year at just under 1,000 tonnes and will not likely be dented by this week's currency devaluation, the World Gold Council said. ID:nL3N10O3OP
* U.S. retail sales rebounded in July as households boosted purchases of automobiles and a range of other goods, suggesting the economy was growing solidly early in the third quarter and bolstering the case for a Federal Reserve interest rate hike. ID:nL1N10O0Y6
* The largest unions in South Africa's gold mining sector declared disputes with producers after wage talks deadlocked, sending the negotiations to a government mediator, a necessary regulatory step before their members can go on strike. ID:nL5N10O3OO
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MARKET NEWS
* The dollar steadied after China's central bank said it saw no reason for the yuan to fall any further. USD/
* Asian shares were subdued and on track for a steep weekly loss in the wake of China's move to devalue its yuan earlier in the week. MKTS/GLOB
DATA AHEAD (GMT)
0600 Germany
GDP
Q2
0900 Euro zone
GDP
Q2
0900 Euro zone
Inflation final
Jul
1315 U.S.
Industrial output
Jul
1400 U.S.
Univ of Michigan sentiment index
Aug