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PRECIOUS-Gold on track for biggest weekly loss in more than four months

Published 25/03/2016, 01:57 am
© Reuters.  PRECIOUS-Gold on track for biggest weekly loss in more than four months
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* Dollar heads for 5th day of gains, best run since April

* U.S. jobless claims up last week (Updates prices, adds comment)

By Clara Denina

LONDON, March 24 (Reuters) - Spot gold rebounded after hitting a four-week low on Thursday, but prices were still poised for their biggest weekly loss since November as the prospect of more U.S. interest rate rises has bolstered the dollar.

Hawkish comments from several U.S. Federal Reserve officials this week put investors on guard for the possibility of at least two rates increases this year, with the first potentially as soon as next month, triggering a widespread correction across commodities.

Brent crude oil LCOc1 plunged 3 percent this week, while copper prices CMCU3 fell below $5,000 a tonne.

Spot gold XAU= slipped 0.6 percent in early trade on Thursday to $1,212.20 an ounce, its weakest since Feb. 26, before rebounding to $1,221.26, up 0.1 percent, by 1451 GMT, as the dollar pared some gains after weekly U.S. jobs data.

Gold was on track for a 2.7 percent weekly loss, largely because of Wednesday's 2 percent decline.

London and many other gold markets will be closed on Friday and Monday for the Easter holiday.

U.S. gold GCcv1 slipped 0.2 percent to $1,221.50 an ounce.

"In February there were a lot of concerns about a dovish stance from the Fed, while economists are now starting to figure that there could be two (rate rises) and that would mean some pressure on gold," ING Bank senior strategist Hamza Khan said.

The dollar was up 0.2 percent versus a basket of main currencies, heading for a fifth day of gains, its best run in almost a year.

Data on Thursday showed the number of Americans filing for unemployment benefits rose modestly last week, but revisions for prior weeks showed the labour market was much stronger than previously thought. Louis Fed President James Bullard joined a chorus of officials in highlighting the possibility of at least two rate increases this year, with the first perhaps as soon as April.

Earlier in the week, Philadelphia Fed President Patrick Harker said the central bank should consider another increase as early as next month if the U.S. economy continues to improve, while Chicago Fed President Charles Evans also said he expected two more rate increases this year.

Other central banks, however, will keep their ultra-loose monetary policies, which should cushion the Fed's tightening impact on gold, Commerzbank (DE:CBKG) analyst Daniel Briesemann said.

Silver =XAG gained 0.2 percent to $15.25, platinum XPT= was down 0.3 percent at $955.40 and palladium XPD= fell 1.4 percent to $571.45.

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