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

Published 25/03/2016, 06:26 am
© Reuters.  PRECIOUS-Gold set 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 (Recasts; updates prices, adds comments, byline, NEW YORK dateline)

By Devika Krishna Kumar and Clara Denina

NEW YORK/LONDON, March 24 (Reuters) - Spot gold rebounded after touching 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 priced in dollars.

Brent crude oil LCOc1 fell 2 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 $1,221.95, up 0.2 percent, by 3:10 p.m. EST (1910 GMT), as the dollar pared some gains after weekly U.S. jobs data. was on track for a 2.6 percent weekly loss, largely because of Wednesday's 2.3 percent decline.

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

U.S. gold GCcv1 settled down 0.2 percent to $1,221.60 an ounce.

"The trade into making a new contract low today in gold seems to suggest that the market is yet to find value at this level, so it could head lower into the $1200-level near-term," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago.

"What concerns me is, when the market doesn't rally when there's what's perceived to be bad news, that's overall an indication that the market is weaker," he said, referring to the short-lived rally after the deadly Brussels blasts.

The dollar was up 0.09 percent versus a basket of main currencies, heading for a fifth day of gains, its best run in almost a year.

St. 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.

Philadelphia Fed President Patrick Harker said his colleagues need to "get on with it" and raise rates again, 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 0.1 percent to $15.23, platinum XPT= was down 0.5 percent at $949.75 and palladium XPD= fell about 1 percent to $574.

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