*
Bullion down about 7% in February
*
U.S. January PCE data due at 1330 GMT
*
Gold is in a correction phase -analyst
*
Palladium hits lowest in 3-1/2 years
(Updates prices)
By Arundhati Sarkar
Feb 24 (Reuters) - Gold prices headed for another weekly
fall on Friday, holding near last session's two-month lows as
prospects of more interest rate hikes by the U.S. Federal
Reserve dimmed bullion's appeal amid a slew of strong economic
data.
Spot gold fell 0.3% to $1,816.39 per ounce by 1318
GMT while U.S. gold futures fell 0.2% to $1,822.70.
Bullion has lost about 7% since the beginning of February,
having posted significant declines in the previous two out of
three weeks and is down about 1% this week.
Gold is trying to find support around the $1,820 level, but
prices could drift still lower towards $1,776 on strong personal
consumption expenditure data, said Ole Hansen, head of commodity
strategy at Saxo Bank.
"The market is looking to stabilise after the long overdue
correction, which has now been unfolding for the past three
weeks."
The Fed's preferred inflation measure, the PCE data for
January, is due at 1330 GMT and will be closely watched by
traders.
Data on Thursday showed U.S. GDP increased at a revised 2.7%
annualised rate last quarter, while new claims for unemployment
benefits unexpectedly fell last week.
Recent economic data out of the United States points to a
resilient economy, giving more ammunition to central banks to
raise rates.
"While the metal may continue to drift slightly downward in
the near-term, the medium-term prospects look more promising,
particularly given the view that the U.S. dollar has now
peaked," Kinesis Money analyst Rupert Rowling said in a note.
The dollar index edged up 0.3%, making bullion a less
attractive bet for overseas buyers. Spot silver fell 1.1% to $21.06 per ounce and
platinum dipped 2.3% to $925.17.
Palladium sank 3.8% to $1,394.22, touching their
lowest level since Aug. 2019 at $1,388.05.
(Reporting by Arundhati Sarkar, additional reporting by Seher
Dareen in Bengaluru in Bengaluru; editing by Sharon Singleton
and Jason Neely)
