* Robust U.S. data supports case for near-term rate hike
* Palladium, silver, platinum edge off multi-week lows
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC
(Updates prices, adds comment)
By Jan Harvey
LONDON, May 25 (Reuters) - Gold fell to a seven-week low on
Wednesday after upbeat U.S. home sales data in the previous
session boosted expectations that the Federal Reserve will press
ahead with interest rate hikes in the near term.
The metal has fallen more than 4 percent since Fed meeting
minutes last Wednesday revived expectations of an imminent rate
increase. Gold is sensitive to rising interest rates, which
increase the opportunity cost of holding non-yielding assets.
Spot gold XAU= was down 0.5 percent at $1,220.41 an ounce
at 1415 GMT, off an earlier low of $1,217.25. U.S. gold futures
GCv1 for June delivery were down $8.20 at $1,221.00.
"The economic data is firming up in the US and this is
making the dollar stronger," Naeem Aslam, chief market analyst
at Think Forex, said. "Traders are of the mind-set that the Fed
will increase the interest rate in June."
The dollar hit a two-month high against a basket of
currencies on Wednesday on expectations the Fed will raise rates
in the near term, though it gave up gains against the euro on
relief that there was progress in Greek bailout talks. FRX/
Growing confidence in a pick-up in U.S. economic growth was
fed on Tuesday by data suggesting new U.S. single-family home
sales have hit their highest in eight years.
Holdings in the world's largest gold-backed exchange-traded
fund, SPDR Gold Shares GLD , fell 3.9 tonnes on Tuesday to
868.66 tonnes, its first decline in a month. GOL/ETF
"It all does hinge on the Fed's intentions for June,"
Mitsubishi analyst Jonathan Butler said.
"We had surprisingly hawkish minutes last week which put the
June rate rise back on the cards. That certainly has made life
tough for gold, because the dollar's rallied, 2-year Treasury
yields have rallied, even 10-year yields have rallied somewhat."
Price-sensitive gold buyers in Asia were active overnight,
but were unable to consistently lift prices.
Elsewhere data from the International Monetary Fund showed
regular official sector gold buyers China, Russia and Kazakhstan
raised their bullion reserves again last month, while Venezuela
sold off more of its holdings earlier this year.
Among other precious metals, silver XAG= was up 0.8
percent at $16.33 an ounce, after dipping to a five-week low of
$16.14 earlier in the session.
Palladium XPD= was down 0.5 percent at $528.50 an ounce,
off a 12-week low of $520.60 reached earlier in the day.
Platinum XPT= was at $992.75 per ounce, down 0.4 percent,
after touching a five-week trough of $985.50.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>