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Gold heading for 7th weekly loss on 2017 rate hike views

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Gold edged up slightly on Friday, but was on track for a seventh straight weekly decline amid expectations that the US Federal Reserve will opt for more interest rate hikes in 2017.

[BENGALURU] Gold edged up slightly on Friday, but was on track for a seventh straight weekly decline amid expectations that the US Federal Reserve will opt for more interest rate hikes in 2017.

Spot gold edged up 0.2 per cent to US$1,131.19 an ounce by 0306 GMT. Bullion closed down 0.2 per cent on Thursday.

US gold futures were steady at US$1,132.2 per ounce.

New orders for US-made capital goods rose more than expected in November. Other data on Thursday showed that third-quarter US economic growth beat expectations.

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But the number of Americans applying for unemployment aid hit a six-month high last week and US consumer spending increased modestly in November.

"There is not much reaction (to the news) because the pre-holiday liquidity is very tight," said Helen Lau, an analyst at Argonaut Securities in Hong Kong.

"It is very difficult to gauge the short term direction," Ms Lau said, adding that gold might move according to the dollar.

More consistent evidence of US economic strength could prompt the Fed to tighten credit again sooner than later. Higher rates discourage buying of non-interest-paying bullion, which is priced in US dollars.

The US dollar hovered below the 14-year high set earlier this week. The dollar index, which measures the greenback against a basket of currencies, was slightly down at 103.040.

"The dollar was finding a small bid prior to the long weekend," MKS PAMP Group trader Jason Cerisola said.

Spot gold remains neutral in a range of US$1,121-US$1,137 per ounce, and only an escape could indicate a direction, according to Reuters technical analyst Wang Tao.

Overnight, US equities posted their first back-to-back daily declines of the month in light trading ahead of the Christmas weekend. US indices fell as much as 0.4 per cent on Thursday.

Markets globally appeared be on pause for the holidays, with the MSCI World index down 0.16 per cent on Thursday, and little changed on Friday.

Spot silver edged up slightly to US$15.85.

Platinum rose 0.6 per cent to US$903.99 and palladium was up 0.4 per cent to US$658.

REUTERS

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