* Commodity prices linger near multi-year lows
* Fed officials speak in favour of rate hike
* Euro set to end the week in positive territory
By Alistair Smout
LONDON, Nov 13 (Reuters) - European shares were set for their biggest weekly fall since September on Friday after commodity prices tumbled to multi-year lows on worries over a glut in supply and slower global economic growth.
The FTSEurofirst 300 .FTEU3 fell 1 percent, down 2.9 percent for the week and set for its biggest weekly loss in ten.
Basic resources stocks .SXPP were down more than 5.9 percent this week, with energy shares down 4.8 percent over the same period.
"The markets are alarmed that there have been further sharp falls in commodity prices," Russ Mould, investment director at AJ Bell, said in a note.
"There is increasing evidence that global growth is slowing and investor confidence has been hit as a result."
Commodity prices showed some signs of stabilisation, although they remained near multi-year lows.
Oil prices edged away from two-month lows, having tumbled to near six and a half year lows this week. Prices had dipped to levels last seen in August after concerns over Chinese growth rocked markets.
U.S. crude futures CLc1 touched a 2-1/2 month low of $41.38 per barrel on a persistent rise in U.S. stockpiles and were poised for a 5 percent decline for the week.
Copper CMCU3 , often seen as a good gauge of the world's economic health because of its extensive industrial use, touched a six-year low of $4,787.50 per tonne, below its August trough. It was set for a 3.6 percent loss for the week.
James Butterfill, Head of Research & Investment Strategy at ETF Securities, said he expected the supply of copper to tighten as mining firms cut back on capital expenditure.
"We expect miners to continue to cut capex, which raises concerns over their longer term profitability," he said.
"That's why we think we're nearing the floor in copper ... as the cuts in capex will lead to a constriction on supply. Markets have also priced in a big contraction in Chinese consumption, which the data is not supporting."
Gold XAU= edged back up to $1,086.02 from a six-year low of $1,074.26 per ounce.
RATE HIKE
Futures on Wall Street ESc1 were down 0.2 percent. On Thursday various Fed officials lined up behind a likely December interest rate hike. urn:newsml:reuters.com:*:nL1N137271
Stanley Fischer, the Fed's second-in-command, noted that the central bank could move next month to raise interest rates, while New York Fed President William Dudley said the risk of waiting too long was now roughly in balance with the risk of moving too soon to normalise rates.
U.S. retail sales, due later on Friday, will be closely monitored for further clues about the likely timing of a U.S. rate hike.
Bets that the Federal Reserve will raise U.S. interest rates for the first time in almost a decade next month saw investors pull out of Treasuries at the fastest rate in 1-1/2 years over the last week, Bank of America Merrill Lynch (N:BAC) said on Friday.
The big beneficiaries were European equity funds which are being buoyed by the prospect of another dose of Mario Draghi's stimulus from the European Central Bank next month, notching their 24th week of gains in the last 26. urn:newsml:reuters.com:*:nL8N1382R5
Expectations that the Fed may hike rates while the ECB may ease policy further has pushed the two-year US-German yield gap to its widest in 9 years and the 5-year spread to its widest since 1999.
December could also be the first time since bond markets crashed in May 1994 that the Fed raises interest rates as Europe cuts.
The dollar index .DXY , which tracks the U.S. currency against a basket of six of its major peers, has edged back from Tuesday's seven-month high of 99.50 to last trade at 98.659, flat on the day.
The dollar was also flat at 122.60 yen JPY= , off Monday's 2-1/2-month peak of 123.60.
The euro slipped 0.3 percent to $1.0786 EUR= , remaining under pressure after the ECB's Draghi singled out the currency's more robust performance since May as one driver for a "weakening" outlook on inflation on Thursday.
However, the euro looked set to end the week in positive territory, its loss on the day leaving it well above $1.0700 and stymying those who had expected the greenback to surge again after very strong jobs data a week ago.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 1.4 percent.
Japan's Nikkei .N225 closed down 0.5 percent, snapping a seven-day winning streak, while the Shanghai Composite index .SSEC slipped 1.4 percent.
MSCI's ACWI, the index compiler's broadest gauge of world shares covering 46 markets .MIWD00000PUS fell to its lowest level in a month, having slipped 3.5 percent from its 2 1/2-month high touched on Nov 4.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets in 2015
http://link.reuters.com/dub25t European bourses in 2015
http://link.reuters.com/pap87v Commodities performance
http://link.reuters.com/rac73w
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Toby Chopra and Gareth Jones)